How Companies Can Hedge Risk Of Mass Arbitration

Mass arbitration is a recent trend where companies are hit with thousands of identical consumer or employment arbitration claims. Led by a resourceful plaintiffs' bar that uses targeted online ads to locate potential claimants, coordinated groups of consumers and employees are weaponizing arbitration agreements to create massive leverage against technology companies.

The consequences for companies and employers are stark: Under the applicable arbitration rules or the company's arbitration agreement, the company pays most of the filing and arbitrator fees in consumer or employment arbitrations. With millions of dollars in initial filing fees alone in a mass arbitration, companies must consider of how to mitigate the risk of this emerging form of claim.