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The Law and Practice of Arbitration - 4th Edition

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Introduction

1. The Rise of Arbitration

Arbitration has become the primary process for resolving
civil disputes in American society and international commerce.1 It
would be foolish for lawyers and clients to ignore arbitration’s new
significance and its importance in the protection and vindication of
legal rights. Thanks to the U.S. Supreme Court,2 arbitration now
reaches standard consumer transactions and employment disputes in
the same manner as it applies to disputes for the sale of goods and
services between merchants. It addresses controversies arising under
regulatory law—from antitrust and securities claims to civil liberty
guarantees.3 Subject-matter inarbitrability and public law limits on
private adjudication do not play much, if any, role in the
contemporary U.S. law of arbitration. Under U.S. law, civil disputes
are nearly universally arbitrable.4

At this stage in the development of the U.S. law of
arbitration, it is clear that the Federal Arbitration Act (FAA)5 serves
primarily as a stepping stone for elaborating a judicial doctrine on
arbitration. It is a pulpit from which the Justices can proclaim the
law.6 The U.S. Supreme Court’s decisional law has added
significantly to the content of the legislation.7 For example, FAA
§ 2—unquestionably the key provision of the Act both historically
and in terms of doctrine8—establishes that parties may agree to
surrender their right of recourse to courts. Such an agreement does
not violate public policy. Parties engage in arbitration as a matter of
right. Arbitration represents the lawful exercise of the right to enter
into and make bargains.9 In fact, as the Court’s rulings imply,
arbitration agreements are not mere contracts. To borrow from
Justice Black, in his criticism of the majority’s endorsement of the
separability doctrine in Prima Paint Corp. v. Flood & Conklin Mfg.
Co,10 they are “super” contracts, “[e]levate[d] … above all other
contractual provisions.” Arbitration agreements are the vehicles for
implementing a judicial policy imperative.11 Given the cumbersome
and inefficient operation of judicial litigation, arbitral adjudication
supplies American society with a workable trial process.