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Should No-Class Action Arbitration Clauses Be Enforced?

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Chapter Summary

The enforceability of so-called no-class action arbitration clauses-clauses referring all disputes relating to main contract to an arbitration that is to proceed on an individual basis only-is highly topical for several reasons. What primarily underlies the issue of enforceability of no-class action arbitration clauses is a tension between two fundamental principles: freedom of contract and access to justice-access to justice, which can be defined broadly as access to a fair and efficient process resolving disputes in final and binding manner. In most if not all legal systems today, a contractual clause that would effectively deny a party any reasonable possibility of bringing claims relating to contract to fair, final, and binding adjudication would surely not be enforced, because, access to justice does prevail over freedom of contract. The difficulty relates to whether-and if so, to what extent-class action waivers, when inserted in arbitration clauses, do indeed jeopardize access to justice.

Keywords: access to justice; class action waivers; contractual clause; enforced; freedom of contract; legal systems; no-class action arbitration clauses; resolving disputes



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