Alternative Dispute Resolution – Arbitration

You may recall that in an earlier blog I spoke about alternative dispute resolution. In Massachusetts, the Pre-Trial Conference Memos ask if the parties are” amenable”, that is, agreeable, to alternative forms of dispute resolution. Recently, I blogged spoke about mediation and focused on the perspective that the mediator offers to you at the outset of the mediation. But what about arbitration?

Keep in mind that when the parties agree to arbitrate it becomes binding and has only a very limited right to appeal. Also, many people use the term “binding arbitration”; actually that is a redundancy because the fact that you have arbitrated connotes that its result is binding.

Arbitration has been criticized heavily in recent months. A three part series in the New York Times this past summer and fall gave examples of how unfair an arbitration result can be. Yes, the stories were anecdotal and statistics were not, and probably could not, be provided. I am sure that there is truth that some results are unfair.. I am not always a big fan of arbitration. But let me suggest four reasons why that form of alternative dispute resolution has its proponents. Why is it advantageous to engage in arbitration?

First, there is no question that you will find a time-savings element to it. There need not be as many depositions prior to the arbitration as there would before a jury trial; the litigation costs will be reduced; and likewise you may not need to bring the same number of experts (who most often charge very significant money) to an arbitration. In contrast, before a court you usually bring those expensive experts. You also have a right, along with your adversary, to select the arbitrator or arbitration panel if there is more than one. Certainly your lawyer will try to select somebody who will treat you, the litigant (the person going to the arbitration) in a fair way. Thirdly, there is convenience and efficiency to the process. It can be scheduled for a hearing fairly quickly. The hearing itself is usually of a much shorter duration than a jury trial would be. There are many reasons for that.

There is an element of privacy because an arbitration is held in a private office where the arbitrator has office space. The arbitrator could be a retired judge or could be an experienced lawyer. The hearing is in a private law office or in the arbitration service’s office. Compare that to a jury trial which is necessarily in an open court. Typically, there is no publicity connected to an arbitration. People are not walking in and out of the arbitration room as they can and do in a courtroom.

Seldom does an arbitrator care to venture into decisions of law but there are some inevitable legal issues that may have to be addressed. Rules of evidence are not the same as in a trial and hearsay is not excluded. Nevertheless, the arbitrator may give little weight to such questionable evidence. What I am saying is that hearsay is not excluded. Finally, an arbitrator can actually be three arbitrators although I have seen less of that in recent years. Where more than one is used, each party picks one and the two, already selected arbitrators, in turn select the third. How they decide or what procedure they use for awarding money is up to them. The parties bear the cost of the procedure evenly. Again, it is much cheaper than a properly prepared and presented trial.

Having just discussed the four major advantages of arbitration, I do not mean to suggest that it is necessarily the best route in all cases or in all situations. But it does have its reasons to commend itself. The possibility of having your case resolved by arbitration certainly merits a discussion with your lawyer. There is no shortage of arbitration services available and if you find that it is a sensible route for your case, you should be able to get a hearing sooner rather than later.