Self-Regulation Is a Tool to Mitigate Litigation

It is easy, especially for attorneys, to be cynical about industry self-regulation. Expecting businesses to hold themselves accountable and resolve disputes autonomously might seem unrealistic, especially when court dockets are full and regulatory oversight is increasing.

However, independent industry self-regulation, when developed and implemented properly, is a powerful tool for enhancing consumer trust in business and protecting consumers. And as we emerge from the reduced trust in government wreaked by the COVID-19 pandemic, it is time for independent industry self-regulation to help solve vexing business problems. In-house counsel can play an important leadership role in those efforts. 

What is independent industry self-regulation?

Independent industry self-regulation is a process where a self-regulatory organization (SRO), such as a trade/membership association, a professional society, or a nonprofit:

• Sets standards, guidance, or industry pledges;
• Monitors industry members for compliance; and
• Enforces those standards and other industry rules relating to the conduct of businesses in that industry, typically through an independent third party.

This voluntary — yet accountable — system helps businesses decrease risks to consumers, increases public trust, combats negative public perceptions, and reduces significant litigation expenses, resulting in cost savings.

To read the full article, visit the ACC Docket.