Attempting—and Failing—to Balance Fairness and Efficiency in the Arbitral System: How Arbitration Institutions Are Defeating the Purpose of Arbitration

The Supreme Court has actively expanded the Federal Arbitration Act into realms not originally contemplated by Congress. This harms consumers who are parties to pre-dispute, binding arbitration agreements. If consumers sign a contract containing an arbitration agreement, they may be required to arbitrate everything within the agreement’s scope, including their statutory rights. Simultaneously, the Court has restricted class action arbitration—a device on which consumers have relied when they are forced to arbitrate. The Court’s expansion of arbitration and restriction of class action arbitration has led many to distrust and advocate for changing the arbitral system. Arbitration institutions have directly reacted to the concerns about arbitration by promulgating more rules, procedures, and safeguards to make arbitration fairer for consumers. However, adding rules and procedures is probably not enough to make arbitration proceedings truly fair, and doing so creates a system that is so court-like that arbitration loses its chief benefits—affordability and efficiency. Thus, if the Court continues with its expansive arbitration jurisprudence and its anti-class action arbitration jurisprudence, institutional reaction is an unlikely solution to address arbitration’s fairness concerns