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4 Nev. L.J. F. 1 (2020)

handle is hein.journals/nvljform4 and id is 1 raw text is: 










   FINDING LIGHT IN ARBITRATION'S DARK

                               SHADOW


                         Nicole   G.  Iannarone*

                               INTRODUCTION

    In Arbitration's Dark Shadow,  Professor Benjamin  P. Edwards  outlines
harms  arising from  industry-wide adoption  of pre-dispute arbitration agree-
ments  (PDAAs)   that remove certain classes of disputes between sophisticated
repeat players and consumers with little to no bargaining power from state and
federal courts.' Edwards discusses the lack of transparency when  PDAAs   are
used, leading to informational asymmetries skewed against consumers.2 He  de-
scribes arbitrators who do  not apply law,  and the unfortunate phenomenon
where  law ceases to further develop in industries where arbitration is the prima-
ry means  of dispute resolution.3 Edwards concludes by  suggesting regulatory
intervention on behalf of consumer  interests as a solution for addressing the
harms  arising from industry-wide PDAAs.4
    Edwards'  bleak picture focuses on the dark. But at the edges of the shadow
arbitration casts over consumer disputes, a bit of light glimmers. This short es-
say in response to Arbitration's Dark Shadow   examines  the light visible at
the borders of mandatory  arbitration's shadow in one  industry Professor Ed-
wards highlights - securities disputes between an investor customer and a bro-
ker-dealer.5 Though  Edwards  is correct that mandatory arbitration is often a
black box  emmeshed   in shadow,  the few instances where  light exists in the
form  of public data should be highlighted, examined, and studied. We should
not close our eyes in the dark. Instead, we should adjust to lessened light and
determine what we  can learn from the information we can see.
    This  short essay begins by describing the publicly available information
made  available by the Financial Industry Regulatory Authority (FINRA)  about


* Nicole G. Iannarone, assistant professor of law, Drexel University Thomas R. Kline
School of Law.
i Benjamin P. Edwards, Arbitration's Dark Shadow, 18 NEV. L. J. 427, 428 (2018).
2 Id. at 431 (Importantly, arbitration also often removes the frequency, type, and result of
disputes from the public eye, undercutting reputation's ability to police market behavior);
see also id. (Arbitration and private dispute resolution remove a discovery and broadcast
channel for reputational information, making it less likely that non-legal market forces will
deter misbehavior.).
3 Id. at 432-434.
4 Id. at 435 (Lifting this shadow may require federal intervention to lessen industries' abil-
ity to impose arbitration on nearly all consumers.).
s Id. at 430 (arbitration agreements also cover nearly all brokerage industry contracts).
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