A Brief History of Arbitration — 900 Years in a Few Paragraphs

Delaware Coalition for Open Gov’t, Inc. v. Strine, 733 F.3d 510 (3d Cir. 2013) (note:  this is the case holding that the public has a right of access under the First Amendment to Delaware’s state-sponsored arbitration program):

2. Arbitrations 

Arbitrations also have a long history. Written records of proceedings resembling arbitrations have been found in England as early as the twelfth century. See 1 Martin Domke et al., Domke on Commercial Arbitration § 2:5 (3d ed. 2011); 1 Ian R. Macneil et al., Federal Arbitration Law: Agreements, Awards, and Remedies under the Federal Arbitration Act § 4.2.1 (1999). Early arbitrations involved community participation, and evidence suggests that they took place in public venues.  See Edward Powell, Settlement of Disputes by Arbitration in Fifteenth-Century England, 2 Law & Hist. Rev. 21, 29, 33-34 (1984); see generally Letters and Papers of John Shillingford, Mayor of Exeter 1447-50 at 8 (Stuart A. Moore ed., 1871) (detailing arbitration proceeding overseen by chancellor and judges). The use of arbitrations to resolve private disputes, however, was limited by English precedent, which prevented the enforcement of binding agreements to arbitrate.   See Macneil § 4.2.2.

In the American colonies, arbitrations provided a way for colonists who harbored "suspicion of law and lawyers" to resolve disputes in their communities in a "less public and less adversarial" way.   Jerold S. Auerbach, Justice Without Law?: Resolving Disputes Without Lawyers 4 (1983); Bruce H. Mann, The Formalization of Informal Law: Arbitration Before the American Revolution, 59 N.Y.U. L. Rev. 443, 454 (1984).

By the eighteenth century, however, arbitrations adopted increasingly formal procedures, and at least some appear to have taken place in public. See Mann, The Formalization of Informal Law at 468.

As the American economy grew, disputes over business transactions led to the further development  of arbitration proceedings. These proceedings were occasionally supervised by a member of the judiciary "not acting in his official capacity."  Id. at 475. The popularity of commercial arbitration, however, was limited by precedent that made agreements to arbitrate essentially unenforceable. See Macneil § 4.3.2; see also Amalia D. Kessler, Deciding Against Conciliation: The Nineteenth-Century Rejection of a European Transplant and the Rise of a Distinctively American Ideal of Adversarial Adjudication, 10 Theoretical Inquires L. 423, 445-46 (2009). It was not until the passage of New York's Arbitration Act of 1920 and the Federal Arbitration Act of 1925, that arbitration agreements began to be treated by the courts like ordinary contracts. Domke § 2:8; see also Macneil § 4.1.2. These arbitration acts allowed private arbitration to take on the important role it now serves in resolving commercial disputes. See Macneil §§ 5.3, 5.4.

Modern arbitration law has led to the development of an industry devoted to offering arbitration services.   Groups such as the American Arbitration Association and JAMS, Inc. facilitate arbitration by appointing arbitrators, organizing hearings, and setting arbitration   standards. See Stephen Hayford & Ralph Peeples, Commercial Arbitration in Evolution: An Assessment and Call for Dialogue, 10 Ohio St. J. on Disp. Resol. 343, 362-68 (1995). These arbitrations, unlike some of their antecedents, are distinctly private. Parties engaged in arbitration must pay both for the arbitrations and for the space in which the arbitrations occur, and they usually choose to close their arbitrations to the public. See Michael Collins, Privacy and Confidentiality in Arbitration Proceedings, 30 TEX. INT'L L.J. 121, 122 (1995). But see 3 Macneil et al., Federal Arbitration Law § 32.6.1 (1999) (noting that parties can elect to allow access to proceedings).

Although modern arbitration is dominated by private actors, a number of jurisdictions offer alternative dispute resolution procedures as a supplement to civil litigation. See generally Yishai Boyarin, Court-Connected ADR--A Time of Crisis, A Time of Change, 50 Fam. Ct. Rev. 377 (2012). These procedures are sometimes called arbitrations, but unlike private arbitrations, they are usually non-binding, and can sometimes be initiated without the parties' consent. See Amy J. Schmitz, Nonconsensual + Nonbinding = Nonsensical? Reconsidering Court-Connected Arbitration Programs, 10 Cardozo J. Conflict Resol. 587, 588-89, 618 (2009).

The history of arbitration thus reveals a mixed record of openness. Although proceedings labeled arbitrations have sometimes been accessible to the public, they have often been closed, especially in the twentieth century. This closure, however, can be explained by the private nature of most arbitrations. Confidentiality is a natural outgrowth of the status of arbitrations as private alternatives to government-sponsored proceedings. Indeed, we would be surprised to find that private arbitrations--taking place before private arbitrators in private venues--had historically been accessible to the public.

 

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