Originally from American Review of International Arbitration - ARIA

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I. INTRODUCTION
If a pollster asked a random selection of Americans for a one-line verbal
portrait of arbitration, common responses might include the following: (i) private
litigation arising for construction and business disputes; (ii) a mechanism to
resolve workplace tensions between management and labor; (iii) a process by
which finance companies and stock brokers shield themselves from customer
complaints; (iv) a way to level the playing field in deciding commercial
controversies among companies from different parts of the world; (v) the way big
corporations use NAFTA to escape regulation. To some extent all would be
correct.1
Unfortunately, these different varieties of arbitration have all been squeezed
into the same antiquated arbitration statute. Enacted 75 years ago as a simple
procedural device to enforce arbitration in federal courts, the Federal Arbitration
Act (FAA) has now been pressed into service as a body of substantive law that
binds state courts as well, requiring that arbitration agreements be enforced on the
same footing as other contracts.2 The Act is as ill-suited to such use as an allterrain
vehicle. As drafted, the FAA ignores critical distinctions in the level of
judicial supervision suitable to different types of cases. The laissez faire court
scrutiny appropriate to an international proceeding, between sophisticated
business managers with access to competent counsel, may be quite misplaced in a
consumer case, where an arbitration clause might require an ill-informed