9 Reasons that Mandatory Arbitration Agreements are Bad for Consumers
From the report "Mandatory Arbitration and Consumer Contracts"; notes can be accessed in the original
Copyright 2004 PIAC and Option consommateurs
As a result of our review of consumer contracts, case law and academic literature we have discovered 9 ways in which arbitration can act as a barrier to access to justice to consumers. These barriers are added costs or burdens that are not features of court procedures. These barriers can negatively impact a consumer claim in two ways. First, a barrier may be an absolute barrier, an added cost or complexity that will cause a consumer to abandon their dispute or grievance. Second, there are barriers, which will ensure that consumers a less favourable outcome than they would through the courts.
Not all of the barriers we have identified will occur in every arbitration and none of these effects, on its own, may be sufficient for a court to conclude that the underlying arbitration agreement is unconscionable. But, in different combination or in the aggregate these barriers will result in fewer consumer claims and reduced judgments.
It is our contention that where arbitration erects barriers to access to justice for consumers – where arbitration does not protect a consumer’s interest as well as litigation would – that consumers are put at a substantive disadvantage and are less likely to be fairly compensated for their loss regardless of the merits of their case. While arbitration has been dismissed as being merely a procedural choice, when one party is compelled to litigate in a less advantageous forum they are, in reality, losing the ability to enforce their substantive rights. This result is unconscionable and as a result we believe that arbitration clauses should not be enforceable in Canada.
Most consumer disputes are over relatively small amounts of money. It is with claims of less than $10,000 that the negative effects of arbitration are felt the most. The following discussion will focus primarily on these small disputes, highlighting the differences between arbitration procedures and the small claims procedures offered by provincial courts.
In the following section on costs the provinces of British Columbia and Ontario are used to make some comparisons between court and arbitration costs. While the legislation varies somewhat from province to province, the differences are not critical to the following discussion.
In Ontario Small Claims Court, a branch of the Superior Court of Justice, governs disputes in which the damages claimed are under $10,000. Procedural matters are governed by the Rules of the Small Claims Court. Arbitration of consumer disputes in Mandatory Arbitration and Consumer Contracts in Ontario is governed by Arbitration Act, 1991. The Act grants arbitrators absolute authority over procedural matters.
In British Columbia the Provincial Court adjudicates Small Claims; procedural matters are governed by the Small Claims Rules. Arbitration of consumer disputes in British Columbia is governed by the Commercial Arbitration Act (despite its name). In that Act, the rules of the British Columbia International Commercial Arbitration Centre for the conduct of domestic commercial arbitrations (the “BCICAC Rules”) govern procedural matters.
1. Costs
Increased cost to the consumer is the most often cited criticism of mandatory arbitration. Increased costs will discourage consumer claims regardless of the merits of the consumer’s case. There is a threat that since arbitration is more expensive than court, consumers with otherwise meritorious claims will not arbitrate the dispute because the risk of increased costs is greater than the potential reward for proceeding.
Costs of dispute settlement can discourage a prospective plaintiff from filing a claim. The costs of pursuing the claim may be so large that it is not economically viable to pursue the claim. For example, if a plaintiff is seeking $500 from a defendant and it costs $500 to pursue the claim, the plaintiff is not likely to waste her time and effort on the lawsuit.
Secondly, the risk of an adverse result may discourage a plaintiff from pursuing her claim. For example, if the plaintiff was seeking $5000 and it only cost $500 to pursue the claim, the plaintiff would likely proceed. However, it may be that if the plaintiff loses she will be saddled with the defendant’s legal costs or an adverse award of damages. If those potential costs are significantly greater than the $5000 sought, a risk-averse (or economically disadvantaged) plaintiff may not pursue her claim. Where a plaintiff, in either situation, pursues her claim and wins, increased costs will reduce the total amount realized from the lawsuit.
Analysts of alternative dispute resolution indicate that most consumer disputes concern low-priced services, goods or credit “...where the costs associated with redress substantially exceed the expected benefits associated with recovery. Moreover, because the benefits will be received, if at all, in some point in the future, the value of that recovery must be discounted to its present value.” The above factors, combined with the fact that most consumers are risk-averse, may result in a situation where many consumers are forced to abandon legitimate grievances with businesses.
Consumers are particularly vulnerable to increased legal costs. Relatively low monetary amounts are characteristic of consumer claims, thus even slight increases in costs have a significant impact on the ability of a consumer to proceed with a legal dispute. In addition, corporate defendants are much better funded than their consumer adversaries. When the consumer is forced to allocate her already limited resources to pay for an unnecessarily expensive dispute resolution mechanism, the advantage to corporate defendants is further exaggerated.
Analysts of the use of arbitration clauses in consumer contracts in the U.S. contend that the cost of initiating arbitration is invariably more expensive than litigating a dispute in court. American courts, in litigating claims concerning the costs of arbitration, have acknowledged that arbitration costs may be prohibitive for low-income consumers.
Arbitration will necessarily increase the transaction costs of litigation. There are a variety of reasons for this chiefly that: in arbitration, a consumer must contribute to the cost of the arbitrator, hearing room, reporter and clerk. In the court system all of these costs are publicly subsidized.
Research conducted in the U.S. cites a number of instances of consumers deterred from participating in arbitration due to arbitration fees well in excess of court costs. Such examples are available in Canada, as one consumer who was contractually bound to use the arbitration services offered by the Alberta New Home Warranty Program (ANHWP) discovered. The President of ANHWP confirmed that they recently informed a consumer that it would cost him approximately $24,000 to pursue his dispute with his homebuilder.This is, admittedly an example of a complex arbitration, but the costs of even the simplest arbitration appear to be much higher relative to the value of most consumer claims.
Comparison of arbitral and court costs in Canada reveals similar cost disparities. In British Columbia the cost to file a claim up to $3000 in provincial Small Claims Court is $100.78 This fee ($50 in Ontario) entitles the consumer to the use of the courthouse registry facilities, a pre-trial settlement conference with a Provincial Court Justice, a trial in front of a Provincial Court Justice, the services of a court reporter and a hearing room; all subsidized by the consumers’ taxes.
In contrast the BC arbitration centre, BCICAC demands $500 to file a claim plus $150 as an administration fee.80 This simply entitles the consumer to file the claim. Arbitrator’s fees, hearing rooms and court reporters are all an extra cost. Although arbitrator’s fees vary, a few hundred dollars an hour is average. The BCICAC estimates that the simplest arbitration would cost a minimum of $2000; more than ten times the cost of the equivalent small claims litigation and far beyond the reach of all but a few consumers.
As mentioned above, when the costs of arbitration (or litigation) approach the monetary value of the claim there is nothing to gain by pursuing the claim. The potential for costs to act as a barrier does not stop there, arbitral rules on the apportionment of costs make arbitration a far riskier proposition than it would seem.
For the risk averse litigant the threat of an adverse award of costs can be as much of a disincentive as the actual out-of-pocket expenses required to pay for pursuing a claim. However, the rules of small claims courts limit the amount of costs a consumer would be liable for in pursuing an unsuccessful claim. Both the British Columbia and Ontario Small Claims rules of court limit adverse awards of costs to the amount of disbursements, usually a refund of the filing fees and service costs are ordered for the successful party. Ontario allows a maximum of $300 as compensation for legal fees if a lawyer represents the successful party. There is no compensation for legal fees in British Columbia.
In contrast, if a consumer loses in arbitration there is a possibility they may be forced to pay tens of thousands of dollars to cover the legal fees of the company they are suing. Section 54 of Ontario’s Arbitration Act, 1991 gives the arbitrator the authority to award costs in arbitration. Costs are defined as consisting of the parties' legal expenses, the fees and expenses of the arbitral tribunal and any other expenses related to the arbitration. A similar provision appears at s. 11 of the British Columbia act.
It is difficult to quantify what a party’s legal fees might be before pursuing a claim in arbitration. Legal fees will vary with the complexity of the case, the hourly rate of the lawyer(s) hired and the length of the hearing. There is also no way of knowing the regularity with which arbitrators award costs against consumers, but the risk exists. It is also not known how many consumers are discouraged from pursuing an arbitration once they find out that if they lose they could be ordered to pay tens of thousands of dollars of the defendant’s legal fees. The court in Kanitz held that the risk of prohibitive costs was “too speculative to justify the invalidation of an arbitration ageement.” With respect, that view is naïve.
Consider the case of a theoretical unrepresented consumer who has a dispute with a business over a few thousand dollars. The existence of an arbitration agreement would require that this consumer arbitrate her claim, instead of filing in small claims court. Unable to afford a lawyer, the consumer proceeds with the arbitration. Even though the merits of her claim are strong, the consumer’s inexperience and lack of a legal education are no match for the highly skilled lawyers retained by the business. Ultimately, the consumer’s claim is defeated. Not only is the consumer saddled with the costs of defeat, she is also faced with an adverse award of costs requiring that she pay the bill for the business’s lawyers. It is difficult to imagine how such a result, or the potential for such a result would not meet the test of unconscionability to invalidate an arbitration agreement.
The potential for a consumer to pay the business’s legal fees if the claim is unsuccessful is exacerbated by the arbitrator’s ability to order security for costs. Security for costs rules allow businesses to instruct their lawyers to ask that a large sum of money be deposited by the consumer before the dispute is heard, to cover the business’s legal fees of the arbitration, in case the consumer loses. If the consumer can’t pay, the arbitration will never take place.
Rule 29(1)(h) of the BCICAC Rules grants arbitrators the authority to order security for costs. This is not an option in Small Claims Court. If the prospect of ultimately paying the business’s legal fees were not sufficient to discourage the consumer, being required to pay them up front would be.
Small claims courts exist so that everyone has access to affordable justice. Arbitration agreements allow businesses to opt out of a system that clearly mitigates the imbalance between consumers and businesses when there is a dispute. Given the added expense of arbitration it is hard to imagine why a fully informed consumer would consent to arbitration.
2. Procedural fairness
Because arbitration is a creature of contract, the parties are free to invent whatever rules they wish to govern their arbitration. While the majority of mandatory arbitration agreements we reviewed were silent on procedural rules, there is a potential for mandatory arbitration agreements to be drafted to include specific rules that do not benefit consumers. Mandatory arbitration clauses are found in standard form contracts. These contracts are imposed on consumers, not negotiated by the parties. As a result, it is questionable that they would contain procedural safeguards that would specifically address the power imbalance between consumers and businesses under arbitration. In contrast, small claims court rules are created to assist unsophisticated litigants and cannot be changed by a stronger party. Plain language drafting, simplified procedure and judicial intervention assist consumers in pursuing their claims.
It has been argued that adjudication procedures affect dispute outcomes. As profitmaximizing entities, businesses are likely drawn to arbitration rules, which will reduce both the costs of engaging in dispute resolution and the settlement amounts they are ordered to pay. Businesses may achieve these goals in a number of different ways.Some examples follow.
Place of arbitration
Some mandatory arbitration contracts provide that any disputes be arbitrated in or at a certain venue. This choice of forum clause can act as a significant disincentive to arbitrate. There is the potential that the cost of travelling to attend the arbitration could be more than the consumer’s claim. Amazon.ca requires that “Any dispute relating in any way to your visit to the Amazon.ca site or to products you purchase through Amazon.ca shall be submitted to confidential arbitration in Seattle, Washington, United States.”
Limits on discovery
Our civil litigation system sets out a requirement that each party to a lawsuit must
disclose to each adverse party, well before trial, all the facts or information it knows about which are relevant to the issues in the lawsuit, whether or not it is helpful or harmful to the party’s case. None of the arbitration clauses we reviewed contained a limitation on discovery, but arbitration procedures could include such limitations in an effort to control costs. It can be argued that a “lack of discovery is a drawback to consumers, but not to merchants and creditors, who will already have available to them from their own files all the information they need to proceed directly to the merits of the claim.”
Denial of Jury Trials
Mandatory arbitration clauses that limit the consumers’ right to a jury trial are a more meaningful provision in the U.S. than in Canada, because there are relatively few civil jury trials in Canada.
There are various theories as to why denials of jury trials are incorporated into mandatory arbitration clauses. It has been suggested that businesses avoid civil litigation and juries because they expect less sympathetic treatment by juries: “[B]ecause juries generally sympathize with a consumer who has been taken advantage of, access to a jury may be the difference between winning and losing the case.”
It has also been argued that the business preference for mandatory arbitration in consumer contracts is a direct consequence of the wider availability of civil jury trials in the U.S. The complexity of civil litigation in terms of discovery, rules of evidence and the conduct of jury trials in civil cases cause businesses to look for other less complex and less costly options such as arbitration. However, as suggested earlier, the actual application of arbitration by U.S. businesses belies this argument. Many businesses in the U.S. uniformly apply mandatory arbitration in their consumer contracts but not where they expect to be a defendant, such as in business-to-business transactions.
Limits on Damages
Damages are a form of monetary compensation or reimbursement awarded to someone in a legal proceeding where it is determined that they have suffered loss, detriment or injury. Damages may also (albeit much less commonly in Canada) include an amount to reflect punishment for offensive conduct or to deter any future wrongdoing. These damages are known as punitive or exemplary damages. Mandatory arbitration agreements may limit the range of damages which consumers may awarded if the arbitrator rules in their favour. For example, homeowners who are bound to arbitrate their disputes through ANHWP may not receive exemplary or punitive damages.
This kind of limitation is problematic because its absence may have the effect of failing to deter bad business practices. Even though such damages are not commonly awarded in Canada, the threat of such damages provides a fiscal incentive for businesses to reign in disreputable behaviour.
The more practical concern for Canadian consumers is terms that purport to cap the amount of damages payable by the business. Telus’ wireless phone service agreement limits its damages to an amount that would not begin to reflect costs much less actual loss incurred in a legal dispute:
Notwithstanding the limitations of liability in this agreement, in no event shall the aggregate, total liability of TELUS Mobility or its affiliates for damages, injury, losses and causes of action (whether in contract, tort or otherwise) arising from or relating to the provision, use or failure of the service, or any phone used with the service, exceed $20.92
3. Lack of Transparency
Often the parties to an arbitration agreement are bound to a confidentiality agreement – BCICAC Rule 25 states that “[u]nless otherwise agreed by the parties or required by law, all hearings, meetings, and communications shall be private and confidential as between the parties, the arbitration tribunal and the Centre.” In contrast to court proceedings, the evidence presented, the submissions of the parties, the decision or award and even the existence of the dispute itself are kept confidential. This raises critical public policy concerns:
The public has an interest not only in resolving individual disputes, but also in ensuring that publicly promulgated laws are enforced and publicized. When litigation is brought in court, the public has the opportunity to learn about alleged illegal acts. Even before cases go to trial, reporters or participants may publicize the nature of the claims and defenses. In this way the public may learn about defective tires, workplace discrimination, fraudulent credit practices, excessive check bouncing charges, or ineffective termite extermination services. Knowledge of these problems allows members of the public to protect themselves, bring their own lawsuits, or pressure for legislative reform. In contrast, the public may never learn about these significant issues if such disputes are sent to private binding arbitration.
Confidentiality requirements are employed by Canadian organizations such as the Investment Dealer Association of Canada and the Ontario Motor Vehicle Arbitration program. Analysts have suggested that such requirements work against the interests of the consumer. An analysis of the operation of the Ontario Motor Vehicle Arbitration Plan suggests that the plan’s confidentiality requirements work against the interests of consumers. Consumers were prevented from drawing on other individuals’ experiences before the board while the representatives of car companies were repeat players and could thus call on previous experiences before the Board.
4. Risk of inconsistent results
There is a risk that on a given set of facts different arbitrators will reach different conclusions. Since arbitral awards are only binding on the parties to the arbitration clause, arbitral awards cannot be used as precedents in future disputes – in other words the doctrine of stare decisis does not usually operate in arbitration (although labour arbitration awards are published and looked to for guidance in Canada). Confidentiality agreements, as mentioned above, also ensure that arbitral awards are not available for use in future disputes.
Both consumers and business benefit from the doctrine of precedent. If an individual consumer wins an arbitration, that victory will only benefit that individual. In contrast, a victory by a consumer in court assists other consumers because that decision is binding on future trials where the facts in dispute are substantially the same. The precedent operates as an incentive for the company to settle future claims or change its behaviour because they know that it is more likely that they will lose similar disputes in the future.
Relying on precedent also reduces economic uncertainty for business:
If business firms can rely upon future courts to apply the law in the same way they have in the past—that is in accordance with the doctrine of precedent or stare decisis—they will be able to make business decisions with less uncertainty and therefore lower transaction costs. This development can be an enormous “public good” in any economy. Even in a totally honest system, there will always be an uncertainty about how a new issue will be resolved. But, as a body of case law develops and builds, that community which uses that area of law will experience less and less economic uncertainty and thus lower costs. Accordingly, each litigated case with a published opinion—and therefore a settled rule of law—adds to the social capital of the economy.
If, on the other hand, disputes are privately settled with no publication of the results and no way of enforcing the doctrine of precedent, this enormous positive externality will be lost to the economy.
5. Limited rights of appeal
The limited rights of appeal allowed by arbitration statutes are a disadvantage to both parties in a consumer dispute. However, commentators have recognized that “the appeal right is most important to the party likely to have been disadvantaged in the original proceeding.”
6. Lack of protection for class proceedings
The Kanitz decision holds that consumers will not be able to initiate a class action where a valid arbitration agreement exists. Our research indicates that Rogers, Telus, Shaw, Star Choice, Money Mart, and Fast Funds online, include a clause in their arbitration agreement in which the consumer waives her right to commence or to participate in a class action. Amazon.ca has a clause that precludes participating in class arbitration.
As indicated above, class actions are a very valuable legal tool for consumers. They redress the imbalance between consumers and businesses in litigation and they have a major impact on outcomes, the most important one being optimizing deterrence.
The leading judicial view of class actions is that they serve mainly procedural ends. The courts have described the aggregation of claims as serving such procedural purposes as judicial economy and access to justice by making economical the initiating of lawsuits that on their own would be too costly to prosecute. The effect of class actions on deterrence, forcing wrongdoers to modify their behaviour, is also viewed as a form of judicial efficiency.
Some analysts have challenged the dominant view that class actions serve only procedural ends. They challenge the view that deterrence is mainly a procedural rather than a substantive effect and the notion that it is a side-benefit to the more important goal of mass litigation, which is compensation. Deterrence is a critically important substantive effect that serves the primary goal of modern negligence law (and one could argue) general consumer law – to minimise the overall costs attributed to accidents. To ensure that a behaviour or product is altered so that future harm is prevented is arguably more effective than compensation; because compensation alone can never put the victim in the same position they were in before the harm occurred.
Class actions are potentially valuable legal tools for consumers because the benefits of aggregating claims extend beyond the obvious benefit they provide to litigants with individually non-viable claims. As discussed above, the amounts involved in individual consumer transactions where there is a dispute with a business are generally not significant enough to warrant an individual legal action, but may be of sizable value collectively, to warrant a legal action via a class proceeding.
However, It is also true, due to the maximum deterrent effect of aggregating claims, that class actions are valuable to plaintiffs who individually may have a viable claim. There are important reasons why individuals don’t pursue litigation beyond the economic calculation of wealth maximization. These factors include: people’s general distrust of courts and the whole process of litigation; concerns about the risk entailed and the uncertainty of outcome; the stress involved in litigation; the time factor associated with litigating claims.
Class actions mitigate all of these non-monetary risks because the handling of the claim is passed to a risk neutral manager, the class counsel.
Class actions also respond to information deficits, which is another non-monetary factor contributing to individuals not pursuing valid claims. There are many examples where individual may have suffered harm and not know it, (bank overcharges, securities fraud, identify theft).
For all these reasons, aggregation of individually viable claims as well as non-viable claims has an immediate impact on deterrence “and deterrence increases with the universality of the aggregation. That is, a mandatory class would provide optimal deterrence; voluntary joinder, or “opting in” would tend to provide less, and standard “opt out” classes would be somewhere in between.”
Barring class actions generally inhibits transparency and accountability concerning harms that may impact large numbers of consumers. Mandatory arbitration clauses allow businesses to potentially insulate unlawful, unfair or deceptive practices from any meaningful review. By preventing resort to the courts via class action proceedings, it is difficult for consumer plaintiffs to obtain information through traditional discovery processes or challenge negative aspects of consumer products or services that may have an impact upon large numbers of consumers. Mandatory arbitration clauses may also have the effect of protecting businesses from negative publicity.
There is a great danger to consumers that arises from systematic, across-the-board
business practices that have a relatively small impact on individual consumers but, in the aggregate, amount to large-scale fraud. By requiring the adjudication of all claims through arbitration, and prohibiting participation in class actions, the business may effectively insulate itself from accountability.
7. Lack of mutuality between the parties
Mandatory arbitration clauses are found in standard form contracts, which are presented to consumers as a fait accompli, not the result of negotiation between the parties as to the terms of the contract. Such agreements are problematic for consumers because they are at odds with one of the important premises of arbitration, which is that each party enters it into autonomously. In fact, the arbitrator’s authority originates from the parties’ consent to the arbitration agreement.
If two parties experienced in arbitration reach their own agreement to arbitrate a dispute, this represents an autonomous decision as much as any market transaction. If an average consumer, unaware of meaning or purpose of arbitration, happens upon an arbitration agreement by using some product or service, it is highly questionable whether the consumer agreement assented to reflects autonomous consent.
It is difficult, therefore, to understand how an arbitrator can assume jurisdiction over a dispute where one party may not be aware of the existence of the arbitration agreement. It is also questionable that a court may force a party to arbitrate a dispute where there has been no effective consent to arbitrate.
8. Institutional bias – the repeat player effect
Avoiding bias in the decision-maker is one of the important elements in an adjudication process, but it not clear that the arbitration process is any more successful than traditional litigation in avoiding bias.
One of the distinctive differences of alternative dispute resolution over traditional litigation is the apparent control by both parties over the choice of the adjudicator. Although small claims courts are designed to be friendly to the unrepresented litigant through the use of plain language drafting, simplified procedures and facilitative decision makers, judges are imposed on litigants. An individual judge may carry a reputation as being sympathetic or unsympathetic to consumers or unrepresented litigants; either party, however, cannot avoid that judge. Arbitration, in contrast, allows the parties to find and consent to the arbitrator.
The reality of consumer to business arbitration is that there is an inequality of information and control between the parties. Some mandatory arbitration agreements provide that the company, not the consumer, selects the arbitrator. Even in those contracts which do not, businesses generally have the ability to control the process. Businesses have the means to track arbitrators’ records and flex their market power accordingly, while the average consumer cannot distinguish arbitrator A from B and doesn’t usually have the resources to conduct that kind of research.
The ability to be able to effectively research potential arbitrators also represents a significant added cost for a consumer. Since arbitrator’s decisions are not generally a matter of public record, businesses that are involved in frequent arbitration have the advantage of building on their repeated experience of arbitrators’ decisions. The average consumer is not able to access or interpret information on the arbitrator’s past decisions or reputation in the legal community, which could reveal the potential for bias.
It is not surprising that there is a shared perception among consumer advocates and corporate representatives alike that arbitrators are more likely than judges or juries to bring pro-defendant attitudes to their decision-making. Both the existence and the apprehension of bias undermine the arbitration system.
One potential cause of this perceived bias is known as the “Repeat Player Effect”. In arbitration, a consumer typically faces a large corporation that is involved in many cases; the consumer is likely to be involved in just one. There is the potential that an arbitrator develops systematic bias in favour of the large corporation, because the arbitrator depends on the high volume of cases from the large corporation for its livelihood. This may lead to arbitrators favouring institutional parties over individual consumers, as the latter will likely not be using their services again. One critic states: “Even the most scrupulous arbitrators and arbitral organizations may find themselves unconsciously influenced to make findings that favour their valued client.”
9. Litigation efficiency and the repeat player effect
The repeat-player effect also has an impact on the preparation required by each of the parties to make their case before the arbitrator. In consumer to business disputes that are subject to arbitration, consumers will typically oppose a larger corporation. While the larger corporation is often involved in multiple arbitration cases regarding its products or services, the consumer or small business is usually involved in just one case. The corporation is able to utilize economies of scale in its preparation for arbitration and save considerable costs.
In direct contrast, the consumer faces much larger costs of preparing a case for arbitration. The absence of class proceedings and the confidential nature of arbitral awards requires that each consumer attempting to arbitrate a dispute will have to maximize all his or her costs in preparing a case, from fact finding, to legal research and ultimately to legal representation before the arbitrator. As indicated above, critics have suggested that this creates a significant imbalance between the parties to an arbitrated dispute to the detriment of consumers. The analysis of the operation of the Ontario Motor Vehicle Arbitration Plan found that its confidentiality requirements prevented consumers from drawing on other individual’s experiences before the board. In contrast, the representatives of the car companies were able to amass extensive knowledge and experience in this area as they were continually appearing before the arbitrators.
Repeat players often have more to lose and as a result will spend more to get a favourable result. One author describes this phenomenon:
For example, in the case of a consumer suing a large corporation over a relatively minor dispute, the amount at risk to the individual is relatively small. The resources he or she devotes to pursing this claim will be commensurate with the amount in dispute. The corporation, on the other hand, has much more at risk. It may possibly face multiple claims based on the same underlying dispute and, consequently, the resources it allocates to defending the dispute will be significantly greater. The repeat-player will play harder because there is substantially more at risk. While the consumer will hire a recent law school graduate with a few years experience, the corporation will retain a major law firm that specializes in defending such suits. The corporation also has the benefit of being able to choose which suits it will defend or settle, thereby choosing the appropriate forum in which to do battle, and when (or if) it will appeal. In the parlance of the old west, the repeat-player "Haves" will simply "out-gun" the "single-shot" consumer.