We, arbitration practitioners, tend to view every judicial decision in defense of arbitration agreements as a positive for us. Every such decision can seem like another brick in what is now a robust wall protecting the institution of arbitration and ensuring its continuation as a viable means of resolving disputes. But what disputes exactly? In our field, we often use the word “arbitration” to mean “commercial arbitration” or even “international commercial arbitration.” Perhaps this seemingly innocent parochialism is blinding us to a growing backlash that—while not truly directed at commercial arbitration—threatens to hamper commercial arbitration as collateral damage.
Over the past few decades, the increasing trend of corporations inserting arbitration clauses into their contracts with consumers is coming under increased public scrutiny and has had devastating effects on consumer rights. One need only do a simple search on the New York Times editorial opinion section to find countless arguments alluding to arbitration as an “epidemic” and arbitration clauses as something that consumers are “forced” into. Indeed, the arbitration system is coming under attack like never before and the legislative hostility towards the overuse of consumer arbitration is alarming.
This short essay suggests that the trends in consumer arbitration have created a target for legislative (and possibly judicial) action.