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When arbitration subverts democracy: by blocking access to the courts, mandatory arbitration and separability undermine the rule of law.

Article Excerpt
The rise of alternative dispute resolution over the last 30 years has had a profound impact on American justice. Many empirical studies show that ADR methods, such as mediation and arbitration, have produced better outcomes for millions of disputants--results that suit the real needs and interests of the parties through a process that is often more satisfying than traditional litigation.

However, this movement has had costs--and some of those costs have been high. It has contributed, for example, to what law professor Marc Galanter has called "the vanishing trial"--a precipitous drop in the number of jury trials in federal and state courts in the last 40 years. (1)

Another, far more troubling cost is a general reduction in access to the courts. While the number of trials may be decreasing for a variety of reasons, at least the parties get inside the courthouse doors. With mandatory arbitration, even that possibility disappears. When citizen access to justice is denied, the courts and the rule of law--crucial components of our constitutional democracy--are undermined.

Specifically, two different arbitration mechanisms--mandatory arbitration and separability--improperly deny access to courts, which subverts the rule of law.

Mandatory arbitration is now common in a wide variety of disputes, including those involving employment, financial services, and health care. The U.S. Supreme Court essentially upheld the practice for statutory claims more than a decade ago in Gilmer v. Interstate/Johnson Lane Corp. (2) In that landmark case, the Court for the first time held that a statutory age discrimination claim could be compelled into arbitration.

That decision gave the green light to the nascent mandatory arbitration movement, and it paved the way for mandatory arbitration's massive expansion into other areas.

In a typical situation, the institutional actor--for example, an employer, securities brokerage, or health care provider--includes a provision in the boilerplate language of a standard contract calling for the mandatory and binding arbitration of any dispute arising under the agreement. Generally, the parties may not refuse to arbitrate a claim and may not appeal the arbitrator's decision on substantive grounds. Equally significant, because arbitration is an informal process, the arbitrator generally is not required to follow the law and need not even...

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