Two corporations with a contract dispute select an arbitrator with industry expertise, present their cases in a streamlined hearing, and receive a binding decision in three months instead of the three years litigation would require. The confidentiality protects trade secrets and business relationships. Another company includes mandatory arbitration clauses in all employment contracts and consumer agreements. When workers allege discrimination or customers challenge unfair practices, they discover they cannot sue, must use arbitrators the company has selected repeatedly, and face processes that systematically favor the repeat player. Arbitration promises efficient, expert-driven dispute resolution outside congested courts, yet whether it delivers fair outcomes depends enormously on whether parties choose it voluntarily from equal positions or whether powerful entities impose it on those with no meaningful alternative.
The Case for Arbitration as Efficient Expertise
Advocates argue that arbitration serves sophisticated commercial parties better than traditional litigation. Parties can select arbitrators with deep industry knowledge rather than generalist judges who must learn technical details from scratch. A construction dispute benefits from an arbitrator who understands building codes, contracts, and industry practices. A securities matter is better decided by someone with financial markets expertise. From this view, arbitration provides tailored expertise that courts cannot match. Procedures are streamlined, eliminating procedural complexity that serves lawyers more than litigants. Parties control timing rather than waiting years for court dates. Evidence rules are relaxed, allowing decision-makers to consider information that formal rules might exclude. Confidentiality protects business interests, trade secrets, and relationships, enabling honest discussion impossible in public proceedings. Finality matters: arbitration awards are binding with very limited appeals, allowing parties to resolve disputes and move forward rather than spending years on appeals. International arbitration provides neutral forums for cross-border disputes where parties from different legal systems can trust the process. For sophisticated commercial parties who voluntarily choose arbitration and negotiate its terms, it offers advantages that justify foregoing court access: speed, expertise, flexibility, confidentiality, and finality.
The Case Against Mandatory Arbitration as Justice Denial
Critics argue that while voluntary arbitration between equal parties may work, mandatory arbitration imposed through adhesion contracts denies access to justice. Employers force workers to sign arbitration agreements as a condition of employment. Companies bury arbitration clauses in consumer contracts that individuals have no power to negotiate. From this perspective, these are not genuine agreements but take-it-or-leave-it terms that strip away rights before disputes even arise. Arbitrators are not neutral when companies repeatedly hire them while individual workers or consumers hire them once. Studies show that repeat players win more often, suggesting systemic bias toward the entities that provide arbitrators their business. Moreover, mandatory arbitration often includes class action waivers, atomizing disputes so that corporate wrongdoing affecting thousands becomes individual claims too small to pursue economically. A company that overcharges customers $50 each faces no accountability because pursuing $50 through arbitration costs more than the claim is worth, while a class action that would have cost the company millions cannot proceed. Discovery is limited, preventing individuals from accessing evidence that companies control. Appeals are virtually impossible, leaving wronged parties with no recourse when arbitrators err. Confidentiality prevents patterns of discrimination, harassment, or fraud from emerging publicly. From this view, mandatory arbitration serves corporate interests in avoiding accountability while denying individuals access to courts, transparency, and collective action. The solution is eliminating mandatory arbitration in employment and consumer contracts, requiring genuinely mutual agreement to arbitrate, and protecting the right to trial and class actions.
The Repeat Player Phenomenon
One of arbitration's most troubling dynamics is the advantage accruing to parties who use the same arbitrators repeatedly. A corporation that arbitrates hundreds of employment disputes develops relationships with arbitrators. An employee arbitrates once. Even if arbitrators intend to be neutral, knowing that future business comes from corporate repeat players creates subtle pressures. Research consistently shows that repeat players, typically businesses, win more often and receive more favorable outcomes than one-time users. Whether this reflects actual bias, corporations choosing stronger cases to arbitrate, or simply familiarity with arbitrators and processes that comes from repeated use, the statistical pattern suggests arbitration may not be the neutral forum it claims to be. Some arbitration services attempt to address this through arbitrator rotation or prohibiting repeat appointments, yet the problem persists. Meanwhile, in truly voluntary commercial arbitration between sophisticated parties who both participate repeatedly, the repeat player advantage diminishes because both sides know the arbitrators and processes.
The Discovery and Evidence Challenge
Arbitration typically involves limited discovery compared to litigation. For sophisticated commercial parties with relatively equal access to relevant information, this reduces costs without compromising fairness. For employees alleging discrimination or consumers challenging corporate practices, limited discovery means they cannot access emails, policies, or other evidence the company controls that would prove their claims. From one view, streamlined discovery eliminates fishing expeditions and procedural abuse that drive up litigation costs. From another, it systematically advantages the party controlling relevant information while disadvantaging the party who must prove wrongdoing using evidence they cannot access. Whether limited discovery represents efficient informality or structural unfairness depends heavily on whether parties have equal information access and whether claims can be proven without extensive investigation. Meanwhile, relaxed evidence rules mean arbitrators can consider information courts would exclude, which can benefit or harm parties depending on what evidence exists and which party it supports.
The Cost Contradiction
Arbitration is marketed as cheaper than litigation, yet costs vary enormously. Filing fees can be substantial, sometimes exceeding court filing fees. Arbitrator fees of several hundred dollars per hour are typically split between parties, meaning each pays amounts they would never pay in court where judges are publicly funded. For sophisticated commercial parties, these costs are manageable and often less than full litigation. For individual employees or consumers, splitting arbitrator fees can be prohibitively expensive, making the process theoretically available but practically inaccessible. Some consumer and employment arbitration requires companies to pay fees, yet this creates dependence on the payer that may affect neutrality. Whether arbitration costs less depends entirely on what is being compared: arbitration versus full trial is often cheaper, arbitration versus early settlement may not be, and for individuals facing arbitration fee requirements, the process may be more expensive than small claims court would have been.
The Enforceability Advantage
Arbitration awards are generally easier to enforce than court judgments, particularly internationally. The New York Convention on Recognition and Enforcement of Foreign Arbitral Awards means an arbitration award in one country is enforceable in over 150 countries, while court judgments face much more difficulty crossing borders. For international commercial disputes, this enforceability makes arbitration strongly preferable to litigation in any one country's courts. Domestic arbitration awards also receive judicial deference, with courts confirming them and providing enforcement mechanisms while very rarely overturning them on substantive grounds. Whether this represents appropriate respect for parties' choice of forum or excessive deference that prevents correction of erroneous decisions depends on whether you trust arbitrators' expertise or believe judicial review serves important error-correction functions.
The Question
If arbitration provides expertise, efficiency, and finality for sophisticated commercial parties who voluntarily choose it, does that justify allowing corporations to impose it on employees and consumers through mandatory contract terms? When repeat player dynamics systematically advantage businesses over individuals, limited discovery prevents wronged parties from accessing evidence, and confidentiality hides patterns of misconduct, has arbitration become a tool for avoiding accountability rather than resolving disputes? And if the alternative to mandatory arbitration is litigation that most individuals cannot afford anyway, does that make imperfect arbitration access preferable to no realistic recourse at all, or does it excuse privatized justice that serves institutional interests while denying the legal protections that public courts were designed to provide?