Recently there was an interesting Op-Ed piece in the New York Times by Stanford Professor Amalia D. Kessler on Arbitration:
http://www.nytimes.com/2012/03/07/opinion/stuck-in-arbitration.html?_r=1&ref=opinion
Professor Kessler notes that more and more corporations are forcing its consumers and employees to agree prior to the existence of any dispute – that if there is a dispute – it must be handled in arbitration. Such a concept seems illogical, but a number of courts including the United States Supreme Court have upheld this practice. These Courts often point out that the arbitration system is fair and efficient. This, however, raises the question that if it is so far and efficient, why does someone have to agree to it before the dispute arises? Why not wait until there is a dispute and then ask if the parties want to go to arbitration. This is not the way the arbitration process works for consumers and employees.
Originally, arbitration was a mechanicism to be used by businesses or entities with equal bargaining power, whereby they could negotiation a manner to handle disputes outside of court. About 30 years ago the use of arbitration changed — as businesses and employers started to use them in their dealings with consumers and employees — and Courts agreed that mandatory pre-dispute arbitration clauses could be used in this manner to force consumers and employees into arbitration. Essentially, Goliath dictates to consumers and employees the terms of their relationship, and there is no David to save them. Legislation has been introduced in Congress a number of times to level the relationship between consumers and employees when it comes to arbitration; however, these proposed bills have gone no where. Why? Because Goliath ensures they don’t.
Professor Kessler also discusses the similarities between the current manner in which arbitration is being applied to consumers and employees and the ancient practice of conciliation. Conciliation was a system where respected community leaders would negotiate compromises between individuals instead of going to court. The system did not take hold for obvious reasons — it is susceptable to corruption. Two significant situations in which conciliation was used in the past included newly freed slaves during Reconstruction and European peasants recently released from serfdom. History shows us that these slaves and peasants were not treated fairly. Why should we think that a system created and designed to help corporations with disputes with consumers and employees would be any different? It is not. Look at what happened with the National Arbitration Forum: http://pubcit.typepad.com/files/nafconsentdecree.pdf