The Yale Law Journal

June 2012

Mandatory and Fair? A Better System of Mandatory Arbitration

Miles B. Farmer

121 Yale L.J. 2346 (2012).

This Note proposes a set of reforms that address the problem of systematic bias in mandatory arbitration. Until now, mandatory arbitration literature has focused largely on the pros and cons of the practice rather than on solutions to improve this form of dispute resolution. This Note seeks to shift the debate by showing how institution-level protections can preserve both fairness and efficiency in mandatory arbitration. I argue that the best means of enforcement would be to create a cause of action that enables government prosecutors to bring suit to impose monetary penalties on systematically biased arbitration providers and the businesses who hire them. The threat of such litigation, combined with mandatory data disclosure, will incentivize negotiated self-regulation and result in fairer practices. Because individuals will not be able to appeal their specific arbitration decisions under this system, mandatory arbitration’s central advantage of efficiency will be preserved.