Arbitration under Assault: Trial Lawyers Lead the Charge

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Arbitration is a private-sector alternative to thegovernment court system. Compared with litigation,arbitration is typically quick, inexpensive, and confidential.It generally operates in a commonsense way,without all of the legal jargon and proceduralmaneuvering that go on in court. Unlike judges, arbitratorsare chosen by the parties to the dispute. Casesare resolved by respected professionals with technical,as well as legal, expertise.

Until recently, arbitration was confined to afew narrow categories of disputes. Those categoriesare expanding rapidly because of a renewedemphasis on freedom of contract, which is thecentral principle of the Federal Arbitration Actand recent Supreme Court cases applying that act.Arbitration agreements now cover the broadrange of civil disputes among all sorts of parties,including consumers and employees. That opensup great potential for civil justice reform by fosteringprivate-sector, market-oriented alternativesto the government court system.

Unfortunately, trial lawyers are trying to killthose alternatives. Enforcement of arbitrationagreements is especially threatening to triallawyers because those contracts are the means bywhich disputing parties escape the litigationprocess that enriches so many lawyers.

The trial lawyers' fight against arbitrationreached the Supreme Court during the 2000–01term in two cases, one involving consumer arbitrationand the other involving employmentarbitration. The trial lawyers' lobby had hopedfor rulings that would effectively end enforcementof consumer and employee arbitrationagreements. Fortunately, the Supreme Courtreaffirmed arbitration in both cases, although itdid so by bare five-to-four majorities.

Having failed in the Supreme Court, triallawyers are taking their fight to the halls ofCongress. They support bills to end enforcement oflarge categories of arbitration agreements. Severalsuch bills have been introduced, and one recentlyadvanced out of the Senate Judiciary Committee.Enactment of any of those bills would squelch private-sector alternatives to the lawyer-dominatedcourt systems, violate freedom of contract, andraise costs to American business. While the billspurport to advance the interests of consumers andemployees, they would likely harm most of the peoplethey purport to help.

Stephen J. Ware

Stephen J. Ware is a professor of law at Samford University's Cumberland School of Law in Birmingham, Alabama.