KU Law News
KU Law News
July 22, 2009
KU Law professor testifies in U.S. House on debt collection arbitration
Christopher Drahozal
A University of Kansas School of Law professor testified today before the House Oversight and Government Reform Domestic Policy Subcommittee on the use of arbitration to collect consumer debts.
Christopher R. Drahozal, the John M. Rounds Professor of Law and chair of the Consumer Arbitration Task Force of the Searle Civil Justice Institute (SCJI) at Northwestern University School of Law, discussed the results of a recent SCJI study that offered an empirical look at consumer arbitrations that were administered by the American Arbitration Association (AAA).
The study shows that due process protocols to protect consumers' procedural rights are routinely enforced in AAA consumer arbitrations. Access to justice is provided in a relatively inexpensive and expeditious manner, and outcomes are not biased in favor of businesses that arbitrate on a repeat basis.
View the full report online: http://www.searlearbitration.org
Drahozal also shared preliminary findings from an in-progress SCJI report on how debt collection cases are resolved in court, in order to provide a basis for comparison with AAA consumer arbitrations. These preliminary findings show that creditors win the vast majority of debt collection cases resolved by courts – more than 99 percent of the cases studied – and almost always recover the full amount sought in those cases. These win-rates and recoveries were higher than the win-rates and recoveries for businesses in the AAA debt collection arbitrations examined in the SCJI study.
"While the findings are only preliminary," states Drahozal in his written testimony, "they nonetheless suggest that business win-rates in debt collection cases may be due to the types of claims being brought and not to the venue in which they are adjudicated."
View Drahozal's written testimony, which include the preliminary findings: http://searlearbitration.org/testimony.pdf.