Houston law professor D. Theodore Rave's new paper Settlement, ADR, & Class Action
Superiority (forthcoming from the Journal of Tort Law) contains an
interesting insight about class action practice: when you
get right down to it, there is little functional difference between
(1) a class action settlement, (2) an AT&T
"gold-plated" arbitration clause, and (3) a customer
service action like a voluntary recall. Or, as Professor
Rave puts it:
Functionally, what is happening with class settlements,
voluntary compensation schemes, and mandatory arbitration clauses
in form contracts is very similar. Private actors are
effectively designing a system of ADR in which aggrieved claimants
can seek compensation. The goal is to replace the public litigation
system with a more streamlined and less costly informal process for
resolving a mass dispute and, importantly, to channel claims into
that alternative process. The question of system design
simply comes at three different
