A Shift in Consumer Arbitrations?

Usually, in consumer arbitrations, the business bears the burden of most (if not all) of the associated costs. The fees can be expensive and represent the underlying leverage behind mass arbitrations.

But have things shifted?

Starz Entertainment, a television network owned by mass media giant Lionsgate, has implemented a novel fee-shifting procedure, presumably designed to thwart mass arbitrations. Its customer agreement not only requires mediation as a condition precedent before filing arbitration, it mandates that these mediations occur by & through ADR provider JAMS and that the costs for the mediation are to be evenly split between the business and the consumer.

The Keller Postman firm, which represents some 100,000 Starz customers, argues that this requires customers to pony up thousands of dollars of fees each before they can actually arbitrate their claims.

It remains to be seen what comes of this, but it could be a game changer in the world of arbitration and even class actions.

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