Commentary

Trial Lawyers Go to War Against Arbitration

By Stephen J. Ware
May 3, 2002

Stop arbitration! That’s the latest battle cry from the Association of Trial Lawyers of America (ATLA) and Trial Lawyers for Public Justice (TLPJ). While most Americans remain riveted by our war against terrorism, the nation’s premier special interest group - trial lawyers - has embarked on a mini-war of its own. This time the goal is more subtle than merely extorting money from tobacco giants, gun makers or some other hapless industry. The new goal is to tighten the lawyers’ monopoly grip on the court system, and prevent the rest of us from choosing a more efficient means of resolving our disputes. How could that happen? Just get Congress to enact legislation that will rein in the growing movement toward arbitration.

Consider the Motor Vehicle Contract Arbitration Fairness Act, which recently cleared the Senate Judiciary Committee. It’s the first in a series of lawyer-backed bills designed to shut down arbitration as an alternative to expensive and unpredictable litigation. Specifically, the proposed legislation states that arbitration provisions in automobile-industry contracts will not be enforceable. True enough, the bill deals with only one industry, but its passage would increase the chance that other anti-arbitration bills - covering a wide range of consumer and employment contracts - will become law. That’s why it’s important to understand the broader objectives of trial-lawyer groups like ATLA and TLPJ, and challenge their assault on arbitration before it’s too late.

What is this thing that some lawyers find so threatening? Arbitration is simply private court. Just as Federal Express is a private alternative to the government post office for sending packages, arbitration is a private alternative to the government court system for resolving disputes. Those with a vested interest in the old postal monopoly tried to stop businesses like Federal Express from operating. Similarly, lawyers with a vested interest in a monopoly court system are trying to stop the arbitration business from developing. Yes, some people want to use the government court system, like some people want to use the post office. But if others want to use arbitration they should be free to do so, like they are free to use Federal Express.

If lawyers’ incomes suffer when people opt for arbitration instead of the government courts, that is no reason to stop people from choosing arbitration. It is a reason to improve the government courts, a task for which attorneys are uniquely responsible. Lawyers who wish that arbitration were not so attractive to disputing parties should ask themselves what they have done to make the government court system so unattractive that it drives people toward alternatives.

The answer is that lawyers have concocted rules of evidence and pre-trial procedure that provide lots of work for the legal profession but make litigation costly, time-consuming, and just plain baffling for people with cases in court. By contrast, arbitration is typically quick, inexpensive, and confidential. It operates in a common sense, businesslike way, without all of the legalese and procedural maneuvering that go on in court.

Lawyers who feel threatened by arbitration assert that arbitration is fine when it’s used by two well-informed businesses. But when ordinary people, such as consumers and employees, are “forced” to use arbitration, that takes away their constitutional right to a jury trial. Nobody can take away an individual’s right to a jury trial. An individual can, however, agree to give up that right himself. Indeed, that’s precisely what people do when they agree to arbitrate. Agreeing to arbitrate is no different, in that respect, than agreeing to any other contract term. Whenever someone signs a contract, he gives up some rights in exchange for whatever benefits the contract provides him. But there’s nothing forced or mandatory about it. Contracts are the result of choice.

People should be free to choose for themselves what contracts to make and what rights to give up. Let’s not have trial-lawyer groups like ATLA and TLPJ making those decisions for us. A monopoly court system may serve the interests of trial lawyers; but choice in resolving disputes benefits consumers and employees.

Prof. Stephen J. Ware teaches at Samford University’s Cumberland School of Law in Birmingham, Ala. His expanded paper, “Arbitration Under Assault: Trial Lawyers Lead the Charge,” will soon be published by the Cato Institute.