4 Surprising Truths About the Hidden World of Private Justice

While we often picture justice unfolding in public courtrooms, a quieter and more powerful system of private dispute resolution operates behind the scenes. In this world of Alternative Dispute Resolution (ADR), major decisions are made that affect millions of people, such as the landmark Supreme Court case Epic Systems. This article reveals four surprising truths about the system that quietly shapes our rights, from the workplace to the global marketplace.

Takeaway 1: A Single Supreme Court Ruling Barred 60 Million Workers From Group Lawsuits

In 2018, the Supreme Court case Epic Systems Corp. v. Lewis addressed a major conflict between two federal laws: the Federal Arbitration Act (FAA), which enforces arbitration agreements, and the National Labor Relations Act (NLRA), which protects an employee's right to engage in "concerted activities" for mutual protection. The court was asked to decide if forcing employees into individual arbitration, thereby banning them from joining group lawsuits, was legal. In a 5-4 decision, the court sided with employers, ruling that the FAA’s mandate to enforce contracts as written takes precedence, making individual arbitration clauses enforceable over the right to form class or collective actions.

The real-world impact of this decision was immediate and vast, affecting an estimated 60 million non-unionized American workers. This created a significant barrier for workers with "negative value claims"—cases where the potential recovery is too small to justify the high cost of a lawyer and individual arbitration fees. For example, the cost of pursuing a claim for a few hundred dollars in unpaid overtime can easily exceed the amount owed. A class-action lawsuit is like carpooling: it allows many people with the same legal claim to share the high costs of the journey. By banning these group lawsuits, the Court’s decision forces each worker to hire their own expensive, private taxi. This simple economic reality means many valid employment law violations now go completely unchallenged.

Takeaway 2: An "Arbitrator" and an "Arbiter" Are Not the Same—And the Difference Is Crucial

While the words sound almost identical, their legal meanings are vastly different, and confusing them can lead to a misunderstanding of one's rights. The distinction comes down to formal power and legal enforceability.

• Arbitrator: This role is formal and powerful. An arbitrator acts as a private judge in a highly structured process. Their final decision, called an "Award," is almost always legally binding and can be enforced in a court of law.

• Arbiter: This role is less formal and broader. While an arbiter can be a judge in a dispute, their judgment is often authoritative or advisory, not necessarily legally enforceable. They are not always the top authority, as their judgment is often subject to further review.

This distinction is critical: one represents a binding legal process that replaces your right to go to court, while the other might simply offer an influential but non-binding opinion.

Takeaway 3: The Arbitrator Picked by "Your Side" Still Isn't on Your Side

In many complex disputes, each party is allowed to nominate an arbitrator to the panel, known as a "Party-Appointed Arbitrator." It’s natural to assume this individual would act as your advocate on the decision-making panel. However, this is a fundamental misconception of the process. A party-appointed arbitrator is still required to be impartial and maintain strict neutrality throughout the proceedings. This principle is the bedrock that prevents arbitration from devolving into a battle of biased "hired judges," ensuring that if you find yourself in this process, the decision is meant to be based on facts and law, not allegiance.

Takeaway 4: Major Rulings Get a Final "Quality Check" Before They're Released

Before a major arbitration decision is finalized, it often goes through a little-known but critical review process. At major arbitral institutions like the International Chamber of Commerce (ICC), staff lawyers known as "Institutional Counsel" perform a final quality check. Their unique function isn't to represent a party but to protect the integrity of the process itself. They are the last line of defense against procedural errors that could invalidate the ruling.

As one Institutional Counsel describes their duty:

"When the Arbitral Tribunal issues its final decision, my main duty is to scrutinize that Award for any formal or technical flaws. This vetting process is absolutely critical to ensuring the award is legally sound and fully enforceable in courts worldwide."

This hidden layer of review is a key selling point for institutional arbitration, as it provides parties with confidence that the final award won't be easily overturned in court on a technicality, saving them time and money in the long run.

Conclusion: The Quiet System That Shapes Our Rights

From the terms of our employment to the resolution of global commercial disputes, the world of Alternative Dispute Resolution is more complex and impactful than many realize. It operates with precise rules and specialized roles that have a profound effect on everyday life and work. As private dispute resolution continues to expand, it leaves us with a critical question: how do we strike the right balance between efficiency for some and access to justice for all?