There are significant difficulties in providing consumers with redress because dispute resolution costs are high relative to the sums being sought. Consumers also manifest a reluctance to enter legal processes for other reasons. This prompted the creation of user-friendly small claims courts and encouraged the discussion and sometimes the use of non-judicial, alternative dispute resolution forums for addressing consumer redress. This paper explores the theoretical and practical distinction between these two types of dispute resolution forums. The practical differences are examined on the basis of observation of both types of forums and discussions with practitioners of alternative dispute resolution.
The paper concludes that while there are significant theoretical differences between the two forums, few of these are inherent. In fact, there is evidence that small claims courts have begun to adopt a number of alternative dispute resolution techniques and could adopt more. Nonetheless, some alternative dispute resolution techniques which are not susceptible to adoption by courts are, based on evidence generated through field research for this paper, clearly more efficient for resolving particular types of disputes than analagous techniques used in courts. It is probable as well, though the evidence collected in field observation is not conclusive, that some types of disputes are better resolved by small claims courts.
A more effective consumer redress system might be achieved if the forum and techniques were more appropriately fitted to the particular fuss. The paper offers guidance on how this might be achieved, and the benefits and costs to governments, business and consumers associated with obtaining more effective consumer redress.
Cohen, David S., "Consumer Redress Through Alternative Dispute Resolution and Small Claims Court: Theory and Practice" (1993). Pace Law Faculty Publications. Paper 417.