Most consumer and employment contracts now have arbitration clauses that require any dispute to be resolved in binding arbitration. But, as seen in the high-profile Sterling Jewelers case, not all such clauses explicitly ban arbitration on a classwide basis—at least not yet.

Until they do, there are a number of significant points every practitioner should know about how class arbitration compares to class actions litigated in court.

Defendants hope that the very specter of arbitration will be enough to make plaintiffs drop their suits altogether. But many consumers and employees push back against arbitration clauses, arguing they should be able to bring their class actions before a judge.

“For many years, almost all the clause construction phases resulted in findings that it could go forward to the actual class certification proceedings,” said Mark Levin, a partner at Ballard Spahr LLP in Philadelphia who specializes in class litigation and the structuring and enforcement of consumer arbitration clauses.

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