YOU buy a cellphone, computer or car. You sign up for a credit card or open a retirement account. You apply for a job.

In all these circumstances, you’re told that you must agree to dozens of terms and conditions, set forth in technical verbiage and tiny print. Eager to complete your purchase — or desperate to be hired — you ultimately sign without reading.

If you’re lucky, nothing goes wrong. But a growing number of consumers and job seekers discover, when something does go wrong, that they have unknowingly agreed to waive their right to file a lawsuit. Instead, they must submit to arbitration.

For some, arbitration proves too costly to pursue. Among those who can afford the fees, many learn they cannot enforce their legal rights because arbitration decisions do not need to be based on the law; arbitrators have their own procedures, and some studies have found that they are systematically biased in favor of the companies that hire them. Lawyers are often unwilling to represent arbitration complainants because of award caps in the agreements. And increasingly, these accords bar class-wide arbitrations. Because arbitration decisions are typically not disclosed and not subject to appeal, consumers and workers are left without recourse and must bear the cost of unfair, deceptive and harmful practices.

One 2008 study in the University of Michigan Journal of Law Reform examined employment and consumer contracts used by 21 major corporations and found mandatory arbitration clauses in 93 percent of the employment contracts and 77 percent of the consumer contracts. But Congress has repeatedly failed to step in and fix this system. The proposed Arbitration Fairness Act of 2011 would be a step in the right direction. The legislation would make predispute agreements to arbitrate consumer and employment disputes unenforceable. Similar bills, introduced in 2007 and 2009, both died in committee.

It wasn’t always this way.

Until the early 20th century, American courts often refused to enforce agreements to arbitrate, insisting that parties ought to have their day in court. This began to change with the 1925 enactment of the Federal Arbitration Act, which established that agreements to arbitrate were enforceable like any other contract.

While the arbitration act was initially envisioned as applying primarily to disputes between commercial equals, since the 1980s, the United States Supreme Court has interpreted it in ways that have facilitated corporate America’s efforts to force consumers and employees into arbitration. This trend has accelerated in the last few years.

The standard historical account begins with the Federal Arbitration Act, but the practice of extrajudicial dispute resolution has a much longer history. Mid-19th century Americans across several territories and states — including Florida, California and New York — engaged in a nearly forgotten debate concerning “conciliation courts.”

Widely adopted throughout Europe and its colonies during the late 18th and early 19th centuries, these were institutions composed of respected community leaders seeking to persuade disputants to accept an equitable compromise in secret, lawyer-free proceedings and without regard to the formal rule of law.

Despite the efforts of American proponents of these courts, proposals to establish them went nowhere. In the view of their opponents (including businessmen and lawyers), such courts were incompatible with the American commitment to freedom.

Adjudication, they successfully insisted, was a vital bulwark of liberty. It enabled individuals to publicly assert their rights as equal citizens under the law. As one delegate to the 1846 New York State Constitutional Convention argued, “In a free country like this” — one “where every man was the equal of his fellow-man” — “there would always be litigation.”

There was one exception to the failure of conciliation courts to take root here. The Freedmen’s Bureau courts established in the Reconstruction South to provide justice to the recently freed slaves were modeled on European conciliation courts.

These courts were embraced by the white Northern elite precisely because of perceived parallels between the newly freed African-Americans and European peasants, many of whom had themselves only recently been released from serfdom. But members of this same elite refused to subject those they called Yankees (namely, white men like themselves) to conciliation.

As this history suggests, leading Americans concluded that the practice of conciliation was incompatible with full citizenship in a free democracy. Although we rightly cringe at these men’s willingness to subject particular groups to what they viewed as lesser forms of justice, this history is worth recalling today as ordinary citizens are increasingly being forced into arbitration under the guise of free contract.

This is not to suggest that arbitration today and conciliation of the sort described here are identical. Nor is it to claim that our court system is flawless or that arbitration is always inappropriate. When freely entered and in certain kinds of disputes (especially those between commercial entities), arbitration can save much time and expense to the satisfaction of all.

But as deployed by corporations against many thousands of individual consumers and employees, it bears a troubling likeness to the 19th-century concept of conciliation as a practice suited only for a subservient underclass.

It is long past time for Congress to intervene. The Arbitration Fairness Act is no panacea, but it’s a start.

Source: http://www.nytimes.com/2012/03/07/opinion/stuck-in-arbitration.html.