If You Love Arbitration, Set it Free: How 'Mandatory' Undermines 'Arbitration'

Abstract:     
By forcing employment and consumer cases into the mandatory arbitration system, the Supreme Court's interpretation of the Federal Arbitration Act has created inexorable pressures to judicialize arbitration, thereby tending to undermine what is valuable about arbitration as a dispute resolution process. A large and rapidly-expanding body of judicial doctrine - external arbitration law - now frames arbitration with decisional law on enforceability of arbitration clauses, arbitrability of issues, the judicial enforcement procedures for arbitrations both before and after the award, and sundry related matters. In addition, arbitration is becoming internally judicialized with formal procedures for how a case will be arbitrated, rules imposed extra-contractually, by case law, statute, professional organizations, and the arbitration providers themselves. Finally, academic commentators exacerbate this process of surrounding and infusing arbitration with formal law by focusing on increasingly specific doctrinal questions reflecting acceptance of or resignation to the mandatory arbitration regime. In other words, contemporary arbitration law is largely how courts and commentators cope with the two big mistakes underlying the Supreme Court's FAA interpretation. Believers in arbitration as a faster, simpler and cheaper alternative to litigation should support legislative reversal of judicially-created doctrine of mandatory arbitration.

Number of Pages in PDF File: 39

Keywords: arbitration, mandatory arbitration, pre-dispute arbitration, arbitration agreements, Federal Arbitration Act, litigation, judicial procedure, preemption, employment, consumer, class action, unconscionability, American Arbitration Association

JEL Classification: K41

working papers series