Arbitration Versus Class Action
Week 4 Case Study – Arbitration Versus Class Action
What Should the Judge Do?
1. The judge should let the arbitration proceed as Mr Groetsch has the right to pursue any action that he believes is necessary to advance his claim. Class action suits normally take longer to prosecute because attorneys want to find and represent as many claimants as possible. Attorneys handling the litigation receive a substantial fee from the compensation settlement whereas the cost of arbitration is minimal. Litigation also requires court fees as well as attorney costs while arbitration may only require the cost of a personal attorney and the fee for the arbitrator. Class action lawsuits are argued in a court of law and may require an extensive amount of time to present evidence and testimony. Arbitration, however, is conducted privately between the two parties and an arbitrator. (All Business 2012 ). The process is more informal and limited evidence is presented. The process can begin as soon as an arbitrator is selected and may only require a short time for resolution. Mr Groetsch may receive a bigger award from his arbitration than the members of the class action suit and his award may set a precedent for the pending litigation giving attorneys addition evidence for their case. The fact that the others may only receive 10 cents on the dollar is irrelevant since they chose to pursue litigation rather than arbitration.
2. Delaying the arbitration until the class action suit is settled could work favorably for Mr Groetsch if the plaintiffs received a sizable award. The outcome of the litigation could be used as further evidence in the arbitration. However, if the class action covered a large number of customers, as described in the case study, each claimant may only receive a small settlement. This could have an adverse affect on the arbitration, actually reducing the amount received by Mr Groetsch. The arbitrator cannot advise any party on how to conduct their case or act as an
What Should the Judge Do?
1. The judge should let the arbitration proceed as Mr Groetsch has the right to pursue any action that he believes is necessary to advance his claim. Class action suits normally take longer to prosecute because attorneys want to find and represent as many claimants as possible. Attorneys handling the litigation receive a substantial fee from the compensation settlement whereas the cost of arbitration is minimal. Litigation also requires court fees as well as attorney costs while arbitration may only require the cost of a personal attorney and the fee for the arbitrator. Class action lawsuits are argued in a court of law and may require an extensive amount of time to present evidence and testimony. Arbitration, however, is conducted privately between the two parties and an arbitrator. (All Business 2012 ). The process is more informal and limited evidence is presented. The process can begin as soon as an arbitrator is selected and may only require a short time for resolution. Mr Groetsch may receive a bigger award from his arbitration than the members of the class action suit and his award may set a precedent for the pending litigation giving attorneys addition evidence for their case. The fact that the others may only receive 10 cents on the dollar is irrelevant since they chose to pursue litigation rather than arbitration.
2. Delaying the arbitration until the class action suit is settled could work favorably for Mr Groetsch if the plaintiffs received a sizable award. The outcome of the litigation could be used as further evidence in the arbitration. However, if the class action covered a large number of customers, as described in the case study, each claimant may only receive a small settlement. This could have an adverse affect on the arbitration, actually reducing the amount received by Mr Groetsch. The arbitrator cannot advise any party on how to conduct their case or act as an
References: All Business (2012). Pros and Cons of Arbitration, Retrieved February 2, 2013, from www.allbusiness.com/print/4128-1-9a0bs.html Fugate, M. & Kinicki, A. (2012). Organizational Behavior, (5th ed.). New York, NY: McGraw-Hill/Irwan