The Arbitrator as Agent: Why Deferential Review is Not Always Pro-Arbitration

It has long been thought that minimal judicial review of arbitral awards helps further the federal policy of supporting arbitration. This contribution to a symposium on Judge Easterbrook’s judicial contributions argues that this position has its limits. Viewing the arbitrator as an agent of the parties, as Judge Easterbrook does in the 2001 case of George Watts and Sons v. Tiffany, helps to illuminate that parties might sometimes want to choose a higher level of judicial review than the minimal level required by the Federal Arbitration Act. Allowing parties to opt into higher levels of review might allow high-quality arbitrators to trade on their skill, ensuring that the pool of arbitrators as a whole is of higher quality. The U.S. Supreme Court’s 2008 decision in Hall Street Associates v. Mattel, however, holds that parties cannot contract for higher levels of review of arbitral awards. Hall Street, perversely, might reduce the overall quality of arbitration, leading to more contract disputes in the federal courts.