The devil is in the details: How arbitration system design and training facilitate and inhibit repeat‐player advantages in private and state‐run arbitration hearings

• Author: Peter C. Alter,Shauhin A. Talesh
• DOI: http://doi.org/10.1111/lapo.12155
• Date: 01 October 2020
• Published date: 01 October 2020

ORIGINAL ARTICLE

The devil is in the details: How arbitration system

design and training facilitate and inhibit repeat-

player advantages in private and state-run

arbitration hearings

Shauhin A. Talesh | Peter C. Alter

Irvine School of Law, University of California, Irvine, CA, USA

Correspondence

Shauhin A. Talesh, Professor of Law,

Sociology and Criminology, Law & Society,

University of California, Irvine—School of

Law, 401 E. Peltason Drive, Ste. 3500F, Irvine,

CA 92697, USA.

Email: stalesh@law.uci.edu

Funding information

National Science Foundation, Grant/Award

Number: SES-0919874

[The copyright line for this article was changed

on 08 March 2021 after original online

publication]

Abstract

This article demonstrates that arbitration system design

and the training that arbitrators receive shape the extent to

which repeat players gain advantages in arbitration hear-

ings. While prior arbitration research does suggest that

arbitrator training matters, this is the first article to show

how it matters, as we observe actual arbitration hearings

in private and state-run arbitration systems in two states.

Our comparative analysis links three literatures interested

in how seemingly interest-neutral institutions, like disput-

ing forums, serve in practice to reinforce dominant norms,

values, and hierarchies: (1) sociolegal studies of repeat-

player advantages in disputing, (2) studies of occupational

socialization in educational settings, and (3) neoinstitutional

organizational sociology studies of how managerial values

influence the way in which organizations construct law.

We bridge these literatures by showing how arbitrator sys-

tem design and the occupational socialization that arbitra-

tors receive in private arbitration are primary mechanisms

through which managerial values influence the arbitration

process, ultimately providing a pathway for repeat-player

advantages in hearings. Because our analysis compares

two distinct arbitration systems, we identify variation in

these processes and offer preliminary but tangible policy

recommendations for the design and implementation of

arbitration systems that best protect civil and consumer

rights within arbitral forums that the Supreme Court con-

tinually upholds.

DOI: 10.1111/lapo.12155

This is an open access article under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs License, which permits

use and distribution in any medium, provided the original work is properly cited, the use is non-commercial and no modifications or

adaptations are made.

©2020 The Authors. Law & Policy published by University of Denver/Colorado Seminary and Wiley Periodicals LLC.

Law & Policy. 2020;42:315–343. wileyonlinelibrary.com/journal/lapo 315

Given the recent and dramatic expansion of disputes being heard outside courts and, in partic u-

lar, the role of arbitration in the American legal system, scholars have labored to under-

stand the consequences of favoring arbitration over courts. This endeavor, gaining real

urgency in the 1980s with benchmark Supreme Court decisions approving arbitration’s

expansion, has developed today into a robust literature, much of it focusing on the ways in

which arbitration may serve to favor “repeat players”—that is, regulars in the forum—over

“one-shotters,”who are unlikely to make use of the forum more than once, potentially

exacerbating a phenomenon identified in the courts (Galanter 1974). These studies gener-

ally focus on particular facets of a single arbitral system or comparative analyses of a par-

ticular arbitral forum and the courts.

But scholarship comparing different arbitration systems to one another is strikingly

absent from this discussion (cf. Chandrasekher and Horton 2019). This gap is significant

for two reasons. First, there is no single system of arbitration. Unlike the court system with

its standardized rules and procedures, each arbitration system takes its own stance on myr-

iad issues of design, procedure, and evidence, resulting in a diverse array of dispute resolu-

tion structures all falling under the nominal umbrella of “arbitration.”Insofar as the

existing scholarship focuses on differences between courts and arbitration and outcomes

within single arbitration systems, it has largely failed to assess the impact that variation

between arbitration systems might have on the substantive rights claimed therein and the

extent to which “repeat players”are advantaged over “one-shotters”in a given forum

(Galanter 1974). Second, there is no reason to think that a shift away from arbitration’s

expanded role is on the horizon given the Supreme Court’s recent decisions and the current

political climate. For better or worse, the expanded role of arbitration appears unlikely to

change in the near future (Glover 2015).

Given the expanded role of arbitration in the American legal system and the diverse array

of dispute resolution structures encompassed by the label “arbitration,”it is imperative to

understand how best to protect the efficacy of civil and consumer rights within different arbitral

forums in which repeat players often hold advantages (Galanter 1974). Thus, in this article, we

seek to answer the following question: how do different arbitration system designs and the

training that arbitrators receive to implement those systems facilitate or inhibit repeat-player

advantages in arbitration hearings?

To answer this question, we undertook an analysis of arbitration hearings in California

and Vermont, which involved substantively similar consumer warranty “lemon”laws but

substantially disparate arbitration designs. California’s lemon law allows disputes to be

resolved in dispute resolution forums funded by automobile manufacturers but operated by

external third-party organizations. By contrast, in Vermont, consumer disputes are resolved

using a public arbitration structure operated by the state alone. In California, a single arbi-

trator, trained by the third-party provider using a uniform system and typically without a

background in the automotive industry, adjudicates the dispute. In Vermont, a five-

member board made up of a technical expert, an automobile dealer, and three citizen mem-

bers adjudicates the dispute, having received little to no formal training. The systems adopt

different models of justice and different approaches to procedural nuances. B y analyzing

these disparate systems arbitrating substantially similar consumer protection laws, we are

able to best identify the differences in system design and arbitrator training that facilitate

or inhibit repeat-player advantages. We gained access to and observed fifty-seven hearings

in both states, analyzing hearing transcripts where available and contemporaneous field

notes where they were not.

Selecting these forums for our analysis also allows us to build upon the limited existing liter-

ature comparing arbitration systems. Talesh (2012) undertook a comparative analysis and

found that these different arbitration systems give different meanings to substantially similar

lemon laws operating in both states, and that this is due largely to the way that business and

316 ARBITRATORTRAININGAND DESIGN IMPACTON HEARINGS