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Evaluating "Loser Pays" Clauses in Arbitration Agreements

October 2017 - Law360
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by Brian Laliberte

Several recent judicial decisions have considered the validity of "loser pays" and cost-shifting clauses in arbitration agreements. The most compelling arguments have invoked unconscionability and overriding public policy considerations. Even where courts have rejected those arguments, their decisions reveal how to successfully attack "loser pays" and cost-shifting clauses that may be subject to severance before arbitration begins. They also provide some guidance for companies that want to enforce them as written.

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