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In the past few years, the Supreme Court has issued several important decisions limiting the availability of class-wide arbitration. While the impact on class-wide arbitration itself has been explored intensively, the potential impact on other forms of aggregation has received somewhat less attention, even though principles announced in these class arbitration cases could have an impact on the consolidation of commercial arbitration, including insurance coverage disputes. Lower courts, however, largely consider the landscape for consolidation relatively unchanged. Although several important questions remain unanswered by the Supreme Court, present case law suggests that arbitration clauses may permit consolidation even if those clauses do not address the issue overtly, and that arbitrators, rather than courts, make those decisions.
1. Consolidation of Insurance Arbitration: The Existing Regime
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“Baseball arbitration” refers to the process used in Major League Baseball in which if an eligible player's representative and the club ownership cannot reach a compensation agreement through negotiation, each party enters a final submission and during a formal hearing each side — player and management — presents its case and then the designated panel of arbitrators chooses one of the salary bids with no other result being allowed. This method has become increasingly popular even beyond the sport of baseball.