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Evaluating 'Loser Pays' Clauses In Arbitration Agreements

Law360, New York (October 12, 2017, 11:10 AM EDT) -- 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.

The Eleventh Circuit in Larsen v. Citibank FSB, recently considered whether a “loser pays” clause...
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