Alas, There is No Magic Wand: Arbitration and its Discontents
From Law.com's In House Counsel page comes Beth Bar's New York Law Journal article Some Attorneys Questinong the Advantages of Arbitration.
The chart above represents results from a survey conducted by the International Instititue for Conflict Prevention and Resolution ("CPR") earlier this year.
Aside from arbitral inefficiencies caused by lawyers doing what lawyers do (discovery and pre-trial motion practice) we suspect that a lot of the dissatisfaction comes not from arbitration as a method to resolve disputes, but from ill-advised pre-dispute boiler-plate arbitration provisions that prevent those who are handling the dispute from altering the way in which it is resolved.
We favor post-dispute arbitration agreements in which the parties can resolve the problems created by the skeletel provisions found in most contracts. Post-dispute arbitration contracts can:
- provide for the type and extent of discovery and pre-trial practice necessary for the type of dispute that has arisen under the parties' agreement -- a dispute the contract's drafters may well have been unable to predict;
- provide for the composition of the arbitration panel best suited for the dispute, a single arbitrator with specialty industry knowledge, for example, or a three-arbitrator panel with two party and one neutral arbitrator, or any other combination or permutation that the parties' needs and creativity can give rise to;
- provide for an appellate process if the parties are afraid of a "runaway" arbitrator who provides neither rationale decision-making authority nor decisions tempered by the realities with which the parties must deal;
- place limitations on -- or expand -- available remedies, including all equitable relief otherwise available in a court of law; and,
- just about any other provision the parties' needs makes sensible and efficient.
Here's the good thing about both mediation and arbitration. If the parties can sit down together and craft the best way to resolve their dispute (and a mediator might help with this process) they can make the law fit their needs rather than trying to put the square peg of their conflict into the round hole of local, state, national or international procedures.
And if you could use a contract drafting tune-up, do check out AdamsDrafting. I'd say it's the best, but I believe it's the only web site devoted to clarity in the drafting of contracts. Had Ken Adams existed a generation before I went to law school, I could likely have done something better with at least 5 years of my life when I was litigating this burning insurance coverage question -- does sudden mean quick or only unexpected -- upon which hundreds of millions if not billions of dollars of coverage for environmental clean-up rested.
Finally, we've seen a great draft of Eric Van Ginkel's article on this topic for intellectual property disputes that will appear soon in the IP ADR Blog. Keep a lookout for it.
Pick the forum to fit the fuss.