Default Rules from Mandatory Rules: Privatizing Law Through Arbitration

53 Pages Posted: 4 Jan 1999

See all articles by Stephen J. Ware

Stephen J. Ware

University of Kansas - School of Law

Abstract

This Article considers the extent to which the creation of law has been privatized through arbitration. It suggests that, under Supreme Court cases and other current legal doctrine, vast areas of law are privatizable and that this degree of privatization is possible only through arbitration. The implications of this point are separated along the familiar line between mandatory rules of law and default rules. The first implication is that arbitration jeopardizes mandatory rules of law. To preserve the mandatory effect of these rules, the Supreme Court must make a choice. The Court must either reverse its decisions that claims arising under otherwise mandatory rules are arbitrable, or require de novo judicial review of arbitrators' legal rulings on such claims. The second implication is that claims arising under default rules should be arbitrable and completely free from judicial review for errors of law. The arbitration of claims arising under default rules presents an opportunity to privatize the creation of vast areas of law. It is an opportunity to create private legal systems of unwritten norms, written rules, and the precedents of private courts.

JEL Classification: K40

Suggested Citation

Ware, Stephen J., Default Rules from Mandatory Rules: Privatizing Law Through Arbitration. Minnesota Law Review, Vol. 83, No. 703, 1999, Available at SSRN: https://ssrn.com/abstract=140738 or http://dx.doi.org/10.2139/ssrn.140738

Stephen J. Ware (Contact Author)

University of Kansas - School of Law ( email )

Green Hall
1535 W. 15th Street
Lawrence, KS 66045-7577
United States
785-864-9209 (Phone)

HOME PAGE: http://www.law.ku.edu/ware

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