Consumer Problems and ADR: An Analysis of the Federal Trade Commission-Ordered General Motors Mediation and Arbitration Program

Authors

Arthur Best

Abstract

This Article evaluates a controversial mediation and arbitration program established by General Motors (GM) for owners of certain cars. It began in 1984, under the terms of a Federal Trade Commission (FTC) consent order settling charges that GM had deceptively failed to inform buyers that particular models of cars contained components that had unusually low durability. When the settlement was proposed, debate centered on whether the public interest would be served best by: 1) creation of mediation and arbitration opportunities for individual owners; or 2) prosecution of a single action seeking uniform compensation for all owners. One commissioner feared that the dispute resolution process "could substitute 'random redress' for the automatic restitution to which these consumers are entitled."' Twenty-nine state attorneys general wrote that "the amount of redress will turn on factors personal to each consumer, and not necessarily on the vehicle problem."2 A commissioner in favor of the settlement replied that it "offers the Commission the fastest and indeed the only feasible way to redress the injury suffered by many GM owners."3

Recommended Citation

Arthur Best, Consumer Problems and ADR: An Analysis of the Federal Trade Commission-Ordered General Motors Mediation and Arbitration Program, 1990 J. Disp. Resol. (1990)
Available at: https://scholarship.law.missouri.edu/jdr/vol1990/iss2/2