The 12th International Consumer Law Conference Blog

Organised by NALSAR and the International Association for Consumer Law

26th, Consumer Arbitration and ADR

Richard Alderman; Associate Dean; University of Houston Law Center 

The speaker started out by expressing that consumer rights without redress are of no use. He went on to say that it is essential that consumer have rights that can be enforced and there is need of an effecient and effective means of enforcement. The true measure of the success of these rights is when there is correct implementation of rules and regulations. Enforcement of these rights can be executed in two ways: Private and Public. In the Private method or procedure, the parties bear all the costs, the decision to enforce is upon the consumer and enforcement is through money damages. On the other hand, in the Public procedure, the government bears all the expenses and also makes all the decisions. Also, enforcement is through civil and criminal sanctions. The speaker then went on to talk about how to balance enforcement mechanisms. A typical case in the US would be of defective bycycles. In the case of defective bycycles, the consumer would normally approach the courts by filing a law suit and if the courts see fit, they would award punitive damages. The american civil justice system consists of a judge and a jury. The amercian civil justice system was very rigid and formal not to mention costly and slow. Arbitration on the other hand is faster, cheaper and also less formal. It is also less divisive. Next, the speaker explained how the system of arbitration really works. The organisation that will conduct arbitration is determined by terms of contract. The Organization gives each side a list of arbitrators and each side may “strike,” or eliminate, some or all of the Arbitrators are chosen from names remaining on the list. The Arbitrator(s) render a decision that generally is finally and may not be appealed. Consumer arbitration faces a lot of problems such as the Consumer is forced into arbitration. 
(2) Arbitration is expensive.
(3) No jury. 
(4) No chance of an Appeal. 
(5) No possibility of class actions. 
(6) Not bound by general rules of procedure and law.
The speaker then went on about the dangers of Arbitration. The danger arises for example if, Arbitration is completely controlled by business companies. Auto and home industries have effectively divorced themselves from the civil justice system. Another problem arises due the fact that Arbitration is secret. Consumers need open, public courts and juries. Also, Arbitration is not binding on anyone else whereas consumers need opinions that will be consistent and binding in other cases. In relation to US, the solution is The Arbitration Fairness. 
Speaker 2: [Alternative Dispute Resolution in the UK] Peter Burbidge

Senior Lecturer University of Westminster

The speaker started off by speaking about the alternatives to consumer cases being decided in courts. Forms of ADR are: consensual/ imposed solutions. Conciliation/mediation/ arbitration/ ombudsman. Now, various questions arise such as should ADR exclude the court?,  Who pays – firms, consumers or Government?, Role of consumers associations? The speaker went on about the advantages and disadvantages of the Small Claims Jurisdictions, Trade associations, and the Financial Ombudsman Service. 

Speaker 3: Johanes Widijantoro

The speaker initially spoke about the the transformation of the authoritarian rule to a system of democratic government in Indonesia. He spoke about how local governments, after decentralisation had the power to improve the quality of public services and such. At the same time, the public awareness also spread across indonesia. Ombudsman has been introduced in Indonesia as a part of improving government performance in providing better public services. On other side, business actors were also urged to implement good corporate governance principles to meet consumer rights. Thus, PSO in Yogyakarta has been established and it focuses on public services provided by one business actor or one group of business actors. The speaker went on to enumerate the various motives of PSO and the problems arising from it and the solutions to it. 
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March 2009
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