Verizon’s $100 million Fee Settlement is Setback for Mass Arbitration Critics

Verizon had two chances at the end of 2023 to defend a controversial corporate tactic to avoid paying millions of dollars in arbitration fees when companies are socked with thousands of consumer claims.
The telecom was poised to argue at both the New Jersey Supreme Court and the 9th U.S. Circuit Court of Appeals that its bellwether arbitration process — in which customers whose lawyers have filed more than 25 similar claims must arbitrate their cases in batches of 10, with settlement talks following the resolution of each batch of bellwether cases — is fair to consumers.
The repercussions of the Verizon (VZ.N), opens new tab appeals would have been huge. As you surely recall, most arbitration forums require companies to put up hundreds or thousands of dollars in upfront fees when a consumer files an arbitration demand. When plaintiffs’ lawyers amass hundreds or thousands of clients to file individual arbitration claims, those upfront fees quickly escalate into millions of dollars — and that’s before any determination on the merits of the consumers’ cases.
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