A Fair Alternative to Unfair Arbitration: Proposing an Ombudsman Scheme for Consumer Dispute Resolution in the USA

Mandatory arbitration is facing a backlash in the United States of America. Recently proposed legislations are geared to severely restrict the scope of mandatory arbitration in consumer disputes. This Article proposes the creation of a new hybrid ombudsman scheme on the lines of the Financial Ombudsman Service found in the UK for resolving consumer disputes in the US. The multi-tier alternative dispute resolution system integrating mediation, recommended settlements and adjudications adopted by the FOS internally and the unique position it enjoys in relation to various actors such as the regulators, courts, industry and consumers within the dispute resolution framework enables it to not only act as a grievance addressal point but also as an agent of change. It is about time unfair mandatory arbitration is replaced with fair alternatives such as a hybrid ombudsman scheme.