Mayer Brown's Andrew Pincus, speaking at the 18th Annual Legal Reform Summit, held at the U.S. Chamber of Commerce in Washington, on Wednesday. Photo: Diego M. Radzinschi/ ALM.

A day after the U.S. Senate narrowly voted to void the Consumer Financial Protection Bureau's rule restricting mandatory arbitration clauses, a top lawyer in Washington who'd challenged the regulation demurred from taking much of a victory lap. But he broadly defended arbitration as a “very low cost, very quick” way to resolve disputes.

Mayer Brown partner Andrew Pincus, who filed a lawsuit in Texas federal court last month contesting the regulation on behalf of the U.S. Chamber of Commerce and a coalition of financial industry trade groups, did not address in remarks on Wednesday the future of that case or specifically mention the Senate vote.

Pincus, speaking Wednesday at a U.S. Chamber of Commerce event titled “The Litigation Jungle,” criticized class actions as too often serving the interests of plaintiff lawyers over the harmed consumers they represent.

The CFPB's rule would not have outright banned arbitration clauses but instead prevented them from including terms that force consumers to waive their right to band together to file class actions. If President Donald Trump signs the legislation repealing the CFPB arbitration rule, which only passed the Senate with Vice President Mike Pence's tie-breaking vote, the litigation in the U.S. District Court for the Northern District of Texas will be rendered moot.

Answering a question in which the moderator, Forbes senior editor Daniel Fisher, described the Senate vote as a victory for the Chamber of Commerce, Pincus said most consumer injuries are so specific to the individuals that they do not qualify for a class action.

“In the imaginary, ivory tower world of law school and law professors, class actions are great—you know, if they were cost-free and only filed in meritorious cases. But in the real world, most of the injuries that real people suffer—like a credit card bill that has some number that shouldn't be on it or late charges—they're individualized injuries,” Pincus said. “And what the legal system is terrible at is remedying individual injuries because it's so expensive. Unless the injury is enormous, no sane person would open the door to litigation. Arbitration allows for very low cost, very quick remedying of those individual injuries.”

Pincus has long sung the praises of arbitration. In July, shortly after the CFPB finalized the arbitration rule, Pincus appeared at a U.S. Chamber event where he described the regulation as “not rooted in reality” and said it underscored the pitfalls of insulating a regulatory agency from the political process.

In 2010, he argued on behalf of AT&T in a Supreme Court case in which the justices, ruling 5-4, established that companies could use arbitration agreements to forbid consumers from joining together for class actions. Arbitration agreements have proliferated in the years since the court's 2011 decision, in AT&T v. Concepcion.

Building up to the Senate's vote late Tuesday night, Trump appointees mounted public critiques of the arbitration rule, forcing CFPB Director Richard Cordray to publicly come out in the rule's defense.

CFPB Director Richard Cordray

Keith Noreika, a former partner at Simpson Thacher & Bartlett who was named acting comptroller of currency in May, had faulted the CFPB analysis at the foundation of the arbitration rule and raised concerns that the regulation would risk the “safety and soundness” of the financial system.” On Monday, the Treasury Department published a report arguing that the arbitration rule opened a door for more class actions and would “effect a large wealth transfer to plaintiffs' attorneys.”

Late Tuesday, Cordray described the Senate's 51-50 vote as a “giant setback for every consumer in this country.” If Trump signs the legislation, the CFPB rule will be the 15th regulation repealed this year under the Congressional Review Act—a tool that gives lawmakers 60 legislative days to reverse an agency rule. Before this year, the law had been successfully used only once in its 21-year history.

“Wall Street won and ordinary people lost,” Cordray said in a prepared statement. “This vote means the courtroom doors will remain closed for groups of people seeking justice and relief when they are wronged by a company. It preserves a two-tiered justice system where banks can have their day in court but deny their customers the same right.”

Cordray said the Senate vote “robs consumers of their most effective legal tool against corporate wrongdoing. As a result, companies like Wells Fargo and Equifax remain free to break the law without fear of legal blowback from their customers.” He urged Trump to veto the resolution.

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Mayer Brown's Andrew Pincus, speaking at the 18th Annual Legal Reform Summit, held at the U.S. Chamber of Commerce in Washington, on Wednesday. Photo: Diego M. Radzinschi/ ALM.

A day after the U.S. Senate narrowly voted to void the Consumer Financial Protection Bureau's rule restricting mandatory arbitration clauses, a top lawyer in Washington who'd challenged the regulation demurred from taking much of a victory lap. But he broadly defended arbitration as a “very low cost, very quick” way to resolve disputes.

Mayer Brown partner Andrew Pincus, who filed a lawsuit in Texas federal court last month contesting the regulation on behalf of the U.S. Chamber of Commerce and a coalition of financial industry trade groups, did not address in remarks on Wednesday the future of that case or specifically mention the Senate vote.

Pincus, speaking Wednesday at a U.S. Chamber of Commerce event titled “The Litigation Jungle,” criticized class actions as too often serving the interests of plaintiff lawyers over the harmed consumers they represent.

The CFPB's rule would not have outright banned arbitration clauses but instead prevented them from including terms that force consumers to waive their right to band together to file class actions. If President Donald Trump signs the legislation repealing the CFPB arbitration rule, which only passed the Senate with Vice President Mike Pence's tie-breaking vote, the litigation in the U.S. District Court for the Northern District of Texas will be rendered moot.

Answering a question in which the moderator, Forbes senior editor Daniel Fisher, described the Senate vote as a victory for the Chamber of Commerce, Pincus said most consumer injuries are so specific to the individuals that they do not qualify for a class action.

“In the imaginary, ivory tower world of law school and law professors, class actions are great—you know, if they were cost-free and only filed in meritorious cases. But in the real world, most of the injuries that real people suffer—like a credit card bill that has some number that shouldn't be on it or late charges—they're individualized injuries,” Pincus said. “And what the legal system is terrible at is remedying individual injuries because it's so expensive. Unless the injury is enormous, no sane person would open the door to litigation. Arbitration allows for very low cost, very quick remedying of those individual injuries.”

Pincus has long sung the praises of arbitration. In July, shortly after the CFPB finalized the arbitration rule, Pincus appeared at a U.S. Chamber event where he described the regulation as “not rooted in reality” and said it underscored the pitfalls of insulating a regulatory agency from the political process.

In 2010, he argued on behalf of AT&T in a Supreme Court case in which the justices, ruling 5-4, established that companies could use arbitration agreements to forbid consumers from joining together for class actions. Arbitration agreements have proliferated in the years since the court's 2011 decision, in AT&T v. Concepcion.

Building up to the Senate's vote late Tuesday night, Trump appointees mounted public critiques of the arbitration rule, forcing CFPB Director Richard Cordray to publicly come out in the rule's defense.