“Discourage litigation. Persuade your neighbors to compromise whenever you can. Point out to them how the nominal winner is often a real loser — in fees, expenses, and waste of time. As a peacemaker the lawyer has a superior opportunity of being a good man. There will still be business enough.”[1]

— Abraham Lincoln

Arbitration, one of many forms of what is known today as “alternative dispute resolution,” or ADR, was used to settle private disputes in ancient Greece, Israel and Rome. It was also used as early as 332 B.C. to resolve conflicts between Greek states.[2] Native Americans used arbitration to deal with conflict within and between tribes, and it was commonly used in commercial and maritime matters in medieval Europe.[3] Rulers across Christendom came to submit grievances among themselves to the wise resolution of King Henry II of England, “the Father of the Common Law,” who reigned from 1154 to 1189.[4] And it is traceable in English commercial matters as far back as 1214.[5]

Despite its ancient origins, resistance to arbitration arose in England. In 1609 Lord Edward Coke, England’s great Chief Justice, refused to enforce an arbitration agreement in the decision of Vynior’s Case.[6] Arbitration was further eroded when in 1697 penal bond penalties used by parties to enforce agreements to arbitrate were abolished by statute; hence the courts’ refusal to recognize the agreements became all the more acute. But still recognizing the value of arbitration, Parliament approved its first Arbitration Act in 1698[7] and saved the practice from judicial eradication. However, the act authorized judicial review, and court intervention grew during the 18th century.[8]

Although arbitration had won statutory acknowledgment in England, it had already done so more than 65 years earlier in America. England’s colony of Massachusetts adopted an arbitration act in 1632. And records survive of an arbitration case from the 1640s: A Mrs. Hibbens disagreed with the amount charged for work in her home by a carpenter named Crabtree. At Hibbens’s request, they agreed to each select a carpenter to review the work and fix a fee. But after the two carpenters had done so, Hibbens declared the work unacceptable, refused payment and disparaged the arbiters’ expertise. Following another ill-fated arbitration effort, the dispute was taken to the First Church of Boston for resolution.[9]

Reflecting William Penn’s Quaker repugnance for litigation, in 1682 Pennsylvania adopted a measure for the appointment of three “common peacemakers.” Their “arbitrations” were to be as “valid as the judgments of the Courts of Justice.”[10] Pennsylvania approved more comprehensive legislation supportive of arbitration in 1705,[11] and South Carolina, Connecticut and New Jersey followed suit.[12] The colonial courts rarely interfered.[13] Judges would even send cases to arbitration.[14]

As American commerce grew, so did the popularity of arbitration in the business community. In 1762 John Watts, a New York merchant, wrote that he was predisposed to agree to arbitration with an insurer for the “most speedy and just determination, rather than be put to the expense of two or three lingering lawsuits, that may be spun out for years in the way the law is here.”[15] The New York Chamber of Commerce created the oldest American arbitration tribunal for dealing with commercial disputes in 1768.[16] It would deal with more than 200 disputes between 1779 and 1792.[17]

Further encouraging ADR was the widespread dislike of lawyers.[18] In 1658 Virginia “totally ejected” all lawyers from the colony,[19] and “The Fundamental Constitutions of Carolina” declared it “a base and vile thing to plead for money or reward.”[20] It has been concluded that these feelings against the bar were “the natural reaction of a frontier society to a profession identified with the complexities of civilization.”[21]

Moreover, the few lawyers of the age were often of “inferior quality.” By the end of the 17th century, there were only seven lawyers in New York, “two of whom were transported criminals, one a former dancing master, one a glover, and none who in England had risen to the status of attorney.”[22] Governor Edmond Andros had great difficulty filling judgeships and had to ask London to send attorneys.[23] Yet in America there was a “persistent dream of doing without lawyers.”[24] In 1786 prominent Massachusetts merchant Benjamin Austin proposed that the legal profession be abolished and courts be replaced with a binding arbitration system.[25]

Another factor promoting alternatives to courts was the bench and bar’s unfamiliarity with commercial transactions, but the establishment of chancery courts helped to remedy this following the Revolution.[26] Although states expanded and improved their arbitration acts, use rarely went beyond commercial matters and those dramatically declined[27] because of increased judicial expertise, a vastly improved bar, and a willingness of courts to modify the common law to make it more accommodating to commerce and economic development.[28]

New judicial confidence and competence in commercial law emboldened judges to reverse arbitration awards on technicalities.[29] Awards were overturned and arbitration acts strictly construed under the theory that they were “in derogation of the common law.”[30] In 1802 the first American treatise on commercial law said that arbitration agreements in insurance cases cannot preclude the right to sue “because the tribunals of the land are not, by the contracts of individuals, to be thus ousted of their jurisdiction.”[31] Soon lawyers and courts were openly hostile to arbitration, clearly viewing it as a competitor or interloper, and legislatures passed measures forbidding arbiters to forge commercial rules.[32]

ADR Survives, Despite Resistance

Nevertheless, despite judicial antagonism, ADR survived. For instance, George Washington placed an arbitration clause in his will of 1799. The document’s arbiters were to be “three impartial and intelligent men” and their decision would be “unfettered by Law, or legal constructions” and “be as binding on the Parties as if it had been given in the Supreme Court of the United States.”[33] Illinois lawyer Abraham Lincoln mediated a boundary line disagreement between two farmers.[34] Arbitration also remained widely used in international disputes between nations and to address claims between former slaves and former masters during Reconstruction.[35] These post-Civil War arbitration hearings were conducted by the Freedmen’s Bureau, a federal agency tasked with aiding newly freed blacks in the South.[36]

In the 1870s, the New Orleans Cotton Exchange created an arbitration system for its members, and the New York Stock Exchange likewise adopted arbitration for dealing with disagreements between members and customers. President Theodore Roosevelt inaugurated a new era of mediation and arbitration of labor disputes beginning in 1902 when he successfully mediated a miners’ strike.[37] (He also mediated an end to the Russo-Japanese War.)

During World War I, the federal government mandated that arbitration and mediation clauses be included in collective bargaining agreements to avoid strikes and shortages. And during World War II, the War Labor Board enforced binding arbitration between management and labor. In 1947 Congress created the Federal Mediation and Conciliation Service to help settle labor disputes.[38]

The 1920s saw a resurgence of ADR beyond the labor context as New York led the way in abrogating common law rules against binding arbitration and Congress adopted the Federal Arbitration Act providing for contractually based compulsory and binding arbitration of “a transaction involving commerce.”[39] In the 1960s and ’70s, many academics, consumer advocates and lawyers began calling for new, flexible forms of ADR that were community-based and party-controlled. They contended that these innovations would produce less “polarized results” and preserve relationships and resources. Most of these models pursued “deprofessionalization,” or in other words, lawyer-free processes.[40]

Judges and judicial reformers also argued for ADR to reduce caseloads and costs. This led to court-annexed mediation and arbitration programs,[41] most notably mediation in domestic relations.[42] Much of the credit for the energy behind the modern ADR movement must be given to Chief Justice Warren Burger’s convening of a conference in April 1976 in St. Paul that brought together a diverse group of lawyers, scholars, judges, civil rights leaders and others to find new ways to settle disputes and improve outcomes.[43]

There was a corresponding proliferation of organizations, trainings and certifications for mediators and arbiters. And instead of removing lawyers, more firms and individual practitioners devoted part or all of their practice to ADR, especially mediation services for business. Furthermore, state and federal enforcement agencies, such as HUD and the EEOC, started mediation and conciliation projects.[44]

Tennessee was no exception to the embracement of ADR. In Arnold v. Morgan Keegan & Co. (1996),[45] the Tennessee Supreme Court restricted judicial review of arbitration decisions under the Uniform Arbitration Act, and in Buraczynski v. Eyring (1996)[46] it enforced an arbitration agreement between a doctor and patient. In 1995 the court adopted Rule 31 governing court implementation of ADR and setting qualifications, educational requirements and ethical standards of lawyers and non-lawyers performing as dispute resolution neutrals.[47] Abraham Lincoln would be pleased.

Notes

1. Abraham Lincoln, “Notes for a Law Lecture,” 1 July 1850, in 2 Collected Works of Abraham Lincoln 81 (Roy Basler ed. 1953).
2. Robert Massey, History of Arbitration, (WV Univ., 2005).
3. Steven Certilman, “Throw Down the Muskets, Seek Out the Town Elders” in Vol. 3, No. 2 N.Y. Dispute Resolution Lawyer 10, 10 (2010).
4. See W. L. Warren, Henry II 603 (1973).
5. Massey at 2.
6. 4 Coke’s Rep. pt. 8, 81a & 81b (K.B. 1609).
7. Morton Horwitz, The Transformation of American Law, 1789-1860 145 (1977).
8. Id.
9. Certilman at 10.
10. Lawrence Friedman, A History of American Law 13 (2007).
11. Certilman at 10.
12. Friedman at 13-14.
13. Horwitz at 145.
14. Friedman at 22.
15. Horwitz at 146.
16. Id. at 148; Certilman at 10.
17. Horwitz at 148.
18. See Horwitz at 146; Friedman at 14.
19. David Hawke, The Colonial Experience 292 (1966).
20. Id.
21. Id.
22. Id. at 293.
23. Id.
24. Friedman at 14.
25. Horwitz at 148.
26. Id.
27. Id. at 149.
28. See id. at 154.
29. Id. at 150.
30. Id. at 151.
31. Id.
32. See id. at 152-53.
33. Certilman at 11.
34. Linda Singer, “Alternative Dispute Resolution” in The Spirit of American Law 477 (George Grossman, ed. 2000).
35. Certilman at 11.
36. See Eric Foner, Reconstruction, 205 (1988).
37. Certilman at 11.
38. Singer at 477-78.
39. Certilman at 12.
40. Carrie Menkel-Meadow, “Alternative Dispute Resolution” in The Oxford Guide to American Law 19 (Kermit Hall ed. 2002).
41. Id.
42. Singer at 480
43. Id. at 478.
44. Id. at 480.
45. 914 S.W.2d 445.
46. 919 S.W.2d 314.
47. Carl Pierce, in A History of the Tennessee Supreme Court 270, 321 (James Ely Jr., ed. 2002).

RUSSELL FOWLER is director of litigation and advocacy at Legal Aid of East Tennessee (LAET) and since 1999 has been adjunct professor of political science at the University of Tennessee at Chattanooga. He served as the law clerk to Chancellor C. Neal Small in Memphis and earned his law degree at the University of Memphis in 1987. Fowler has many publications on law and legal history, including many in this Journal.