September 21, 2021

By Paul Stephan, Associate, Cohen Milstein’s Consumer Protection practice

Nothing to Say for the FAA: Why Arbitration Does Not Offer Unparalleled and Mutual Benefits,” University of Memphis Law Review, Volume 51, Book 1, June 2020 (Released: June 2021)

 

Abstract 

As the Supreme Court continues to expand the reach of the Federal Arbitration Act (FAA), scholars continue to debate whether arbitration is an adequate substitute for litigation. Arbitration’s critics are numerous and have raised many objections to its use (and frequently its compulsion by large corporations). In response, supporters have claimed that arbitration offers a host of benefits: speed, cost, finality, informality, simplicity, customizability, privacy, expertise, and better substantive outcomes. Much of the policy debate has focused on whether these touted attributes can be demonstrated empirically.

This Article sidesteps the empirical debate. It shows that even if arbitration’s proponents are empirically correct about the benefits of arbitration, none of those benefits lend support for their position. For any of arbitration’s benefits to count in its favor, the benefit should be both unparalleled—i.e., unable to be replicated in civil litigation—and mutual—i.e., beneficial to both parties. This Article examines each of arbitration’s purported benefits and finds that not a single one is both unparalleled and mutual. This conclusion holds even if the empirical claims of arbitration proponents are assumed to be true. Given arbitration’s lack of unparalleled and mutual benefits, the Article suggests repealing the FAA.

A PDF of Mr. Stephan’s complete article can be accessed here.

More information about the University of Memphis Law Review can be accessed here.