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Balancing Access and Accountability: A Proposal for Impartial Enforcement in Mandatory Arbitration
Balancing Access and Accountability: A Proposal for Impartial Enforcement in Mandatory Arbitration
Mandatory arbitration can resolve disputes more quickly and effectively, but it isn't effective in preventing misuse or tilting the process in favour of businesses. The ability to appeal unfair rulings is a common feature of arbitration reform proposals, however, these changes ignore the main benefits of requiring arbitration and instead make the procedure more like conventional litigation. This Note offers a remedy that maintains mandatory arbitration's key benefits of accessibility, affordability, and speed while guaranteeing more unbiased arbitration proceedings. Rather than concentrating on giving plaintiffs particular remedies, systemic reform is required to address the issues raised by forced arbitration. This involves a mechanism of enforcement wherein parties that create arbitration agreements that are required, as well as arbitration providers, are held responsible for arbitrators who consistently render biased decisions.[1] In addition to saving a lot of money, this supervision grouping into huge cases claiming widespread injustice can address the main issue with forced arbitration. To promote self-policing and offer a useful tool for identifying instances of arbitral fairness, the institution-level policing for the arbitration system should be coupled with a system of restricted data disclosure.
Contracts about financial services, consumer disputes, and the sale of commodities now frequently include mandatory arbitration provisions, demonstrating the growing significance of this practice in the legal system. Every year, the American Arbitration Association handles more than 100,000 disputes. Proponents of mandatory arbitration contend that its accessibility, quickness, and lower cost are necessary for effectively settling conflicts. On the other hand, as state and federal courts handle a rising number of cases and resolve disputes at slower rates, delays in the legal system pose a serious problem. The goal of mandatory arbitration is to expedite the resolution of disputes so that decisions are made more quickly and with less delay.
Additionally, it can use market power to provide quick settlement, particularly in cases when the party choosing the arbitrator has a strong incentive to settle. Additionally, mandatory arbitration saves the government money—privately as opposed to using tax cash. It is challenging to provide concrete evidence, nevertheless, that it is less expensive and speedier than conventional litigation.[2]
Although mandatory arbitration has benefits, there is a chance that it may be abused, particularly if the parties have uneven negotiating strength. When one side selects the arbitrator alone, they are more likely to pick a biased decision-maker than an arbiter who would rule in their favour. Election bias is a major issue as there is no workable way to get impartial arbitrators together when there is no dispute settlement process. Companies hire arbitration organizations like the AAA and National Arbitration Forum to serve as their arbitrators; as such, they may have the incentive to tilt the proceedings in the company's favour. The first evidence supports the existence of player bias, with corporations that file more cases with the same arbitrators seeing superior outcomes. However, prejudice is probably going unnoticed because of the existing legal restrictions. Subtle acts of wrongdoing or unethical behavior, caused by the absence of punishment, promote arbitration preference. Opponents of forced arbitration contend that reasonable parties wouldn't sign unjust contracts with biased arbitrators, yet employee and consumer arbitration refutes this claim. Consumers and workers might not consider the danger of arbitration, and parties cannot fairly expect to know every element of every contract they sign. For small litigation matters, mandatory arbitration is advantageous since it reduces expenses for both employees and customers.[3] Nonetheless, it is frequently impacted by the wording of arbitration agreements, the absence of substantive norms, and companies that choose which outcomes to pursue. The suggested enforcement plan should be more impartial and unbiased, fostering justice and fairness to avoid broad importance.
References
[1] FARMER, MILES B. “Mandatory and Fair? A Better System of Mandatory Arbitration.” The Yale Law Journal, vol. 121, no. 8, 2012, pp. 2346–94. JSTOR, http://www.jstor.org/stable/41510479. Accessed 16 Feb. 2024.
[2] Marian, Cornel. "Balancing transparency: the value of administrative law and Mathews-balancing to investment treaty arbitrations." Pepp. Disp. Resol. LJ 10 (2009): 275.
[3] Schwartz, David S. "Mandatory arbitration and fairness." Notre Dame l. rev. 84 (2008): 1247.
- Recognizes the benefits of speed and affordability in mandatory arbitration but notes concerns about bias and misuse, especially in unequal power dynamics.
- Highlights the risk of biased outcomes when one party unilaterally chooses the arbitrator, emphasizing potential corporate influence on arbitration providers.
- Urges systemic changes to ensure accountability, proposing a mechanism to address consistent bias and maintain fairness in mandatory arbitration.
