The Arbitration-Litigation Paradox

Assistant Professor of Law Pamela Bookman,  Temple University Beasley School of Law, has written “The Arbitration-Litigation Paradox,” Vanderbilt Law Review, Forthcoming; Temple University Legal Studies Research Paper No. 2018-29.  In her journal article, Professor Bookman examines whether the United States Supreme Court’s jurisprudence universally favors the arbitral forum.

Here is the abstract:

The Supreme Court’s interpretation of the Federal Arbitration Act is universally touted as favoring arbitration. In many contexts, such pro-arbitration decisions are viewed as supporting the Court’s more general hostility to litigation as a whole. Those pro-arbitration and anti-litigation policies are considered to be mutually consistent. Indeed, the Court describes the essential features of arbitration as being “informal,” “speedy,” “efficient,” and therefore the categorical opposite of litigation.

This Article contends that the Court’s approach is not uniformly pro-arbitration. On the contrary, the Court’s pro-arbitration and anti-litigation values sometimes conflict. When they do, hostility to litigation wins. For example, consider an arbitration clause that explicitly authorizes extensive judicial review. Pro-arbitration policies favoring party autonomy would enforce the clause and allow customized judicial review, but anti-litigation norms would require the opposite. In that factual context and others, the Supreme Court’s hostility to litigation has overridden its support for arbitration. Such results are particularly problematic for international commercial arbitration.

The arbitration-litigation paradox is that because courts play an important, if underappreciated, role supporting arbitration, courts need to support litigation in order to support arbitration. In its haste to squelch certain kinds of litigation and to maintain perceived differences between arbitration and litigation, the Court has damaged international commercial arbitration by undermining international arbitration norms, parties’ choices, and the effectiveness of arbitral awards. A better approach in this field would recognize that litigation is necessary to support arbitration even as the two compete with each other. This Article considers several avenues for pursuing this approach and sets the stage for further research into the relationship between arbitration and litigation.

Professor Bookman’s scholarly papers are available without charge from the Social Science Research Network.

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