A Public Citizen report* released this week shows that Chamber of Commerce-sponsored "studies" purporting to show that pre-dispute mandatory binding arbitration agreements are fair to consumers are about as credible as "studies" showing global warming isn't real.

The report offers a needed check on sham research that threatens to distort an important policy debate. And it comes at a key time, with one bill that would curb some binding arbitration agreements having passed a House Committee yesterday, and the more comprehensive Arbitration Fairness Act poised to come up for a Committee vote soon.

Public Citizen's report debunks the Chamber of Commerce's claim that consumers fare better in arbitrations than in court. In a devastating critique, Public Citizen points to intellectual dishonesty pervading the Chamber's studies. For example, the Chamber cites a study as concluding that arbitration agreements "put the consumer on equal terms with the businesses that drafted them . . ." but omits the sentences immediately following that cautioned that "the appearance of a level playing field may be deceptive" and detailed criticisms of the process. In another incredible example, the Chamber claims that only one study has found that consumers prevail less than half the time in arbitrations--but in fact cites four other studies that found the same thing. It cites surveys ostensibly showing that consumers were satisfied with arbitration, but fails to mention that these surveys were about voluntary arbitration, not pre-dispute agreements buried in adhesion contracts. At one point, the Chamber falsely touts one study as not sponsored by the arbitration industry.

Public Citizen builds on a report it released last year, The Arbitration Trap, to show how mandatory pre-dispute binding arbitration agreements severely disadvantage consumers. When signing up for credit cards, or buying cell phone service or a computer, or even when putting a loved one in a nursing home, consumers often unknowingly agree to allow private arbitrators to resolve any disputes that may arise. In arbitration, consumers face not only biased decision-makers whose profits depend on companies continuing to use their services, but also unfair procedures that, for example, don't allow for discovery and do allow arbitrators to make decisions based solely on documents produced by the company, sometimes without the consumer even knowing about the arbitration.

Public Citizen's earlier study found that in California--the only state that requires that data on arbitrations be made available--businesses prevailed over individual consumers in 94 percent of cases arbitrated before the National Arbitration Forum. The organization's new report demonstrates that, according to most empirical studies, consumers win more often and receive higher awards in court than they do in arbitration.

This week's report powerfully rebuts the latest example of faux-academic research that business interests have fabricated or distorted to support their own policy goals. I only hope that the media and policymakers realize this deception don't allow the Chamber "research" to sow just enough doubt to give politicians cover to vote against what's right.

* I am interning at the Public Citizen Litigation Group this summer. I did not contribute to this report in any way, and I wrote this post on my own initiative, with no review or request by anyone in the organization.