UC Berkeley

Consumer arbitration can act as a vehicle for bringing justice against corporate misconduct. There is a proliferating global trend toward confirming an unprejudiced system of collective redress. In the context of consumer arbitration, class action is a prime example of a legal mechanism that supports the weaker party by giving a group of people an option to present their claims in front of an arbitral tribunal. Enabling consumers to use this mechanism can cultivate a just system with a healthy balance between businesses and consumers. The purpose of this paper is to define an adequate device that can be fair to consumers while also protecting the interests of businesses. The ultimate goal is for such a framework to be incorporated in Saudi Arabia.

The current framework is not as effective as consumers in Saudi prefer to use social media as an outlet instead of adjudicating disputes. Through a comparative analysis methodology, this paper conducts a search for a compromise that can protect consumers’ rights while also acting as an incentive to attract foreign investment. There are two distinct paradigmatic approaches to the areas of consumer arbitration and collective action. Some jurisdictions’ practices could be viewed as favoring businesses at the expense of consumers by focusing on enforcing a pre-dispute arbitration clause. Moreover, such contracts mostly exclude the use of class action. On the other end of the spectrum, other jurisdictions concentrate on the protection of consumers from the misuse of contracts of adhesion by businesses, and they even consider arbitration unfair if the clause was not negotiated after the dispute. In view of these points, the best choice is seemingly to default to arbitration with an opt-out option in addition to an implemented class-action mechanism. These objectives are proposed to further economic and legal development in Saudi Arabia.