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Trial Time vs. Arbitration Time - What are your thoughts?

Please see the following link to a study on Trial Time v. Arbitration Time:

Study

What are your thoughts/comments on this study? Why are some still reluctant to arbitrate?

Please provide your thoughts/comments below.

Comments (16)

Robert L. Cowles:

I believe it is because of the usual limited discovery in arbitration.

The fact that on average arbitrations conclude more quickly than litigations has no particular relevance to a single case. Arbitrators and counsel must work to ensure that their particular case is not protracted.

Certain circumstances may delay the resolution of an arbitration, including:

* The parties selecting a tribunal of busy and popular arbitrators.
* Because an arbitrator's power of coercion is more limited than a judge's, there is greater opportunity for deliberate delays and breaches of procedural deadlines.
* While the parties may initially agree to arbitrate, one party may resist arbitration once a dispute arises. This typically results in litigation where a judge must decide whether to compel arbitration or issue an anti-suit injunction, which in turn, delays resolution of the dispute.

Moreover, deliberate delaying tactics may be more difficult to combat in arbitration than in litigation because arbitral tribunals' coercive powers are much more limited than that of a court.

Finally, while arbitrators can determine claims and defenses summarily, in practice they are often less willing than a court to do so.

I think it is generally true that cases are resolved more quickly in arbitration. There are notable exceptions, but these are almost always party as opposed to arbitrator driven. Parties are sometimes wary of arbitration for a number of reasons. Some fear they won't get adequate discovery. Others worry they will not have broad appeal rights. Some fret that arbitration costs may exceed court costs because of forum and arbitrator fees. All of these concerns can be effectively addressed in a well-managed arbitration process. The best thing a party can do is to hire counsel with the arbitration "litigation" experience to know how to manage the process, with the help of the arbitrator(s).

Arbitration is less formal and usually faster

It seems pretty simple to me. If I'm the attorney for one party in a dispute, and if there is the slightest possibility that I might lose, then why would I want to have my case adjudicated in a forum where the outcome is final, with no opportunity to appeal?
If on the other hand, I want to dispose of the matter as soon as possible, and I'm willing to go with the decision of professionals, rather than a random selection of jury members, then I'd be all for arbitration.
Since I expect that each case has both of these competing elements at work, it behooves the arbitration industry to do a better job of marketing the concept.

Gerard F. Doyle:

Many clients rely on outside counsel's advice whether to agree to arbitration. Many such counsel are reluctant to give up the comfort of the FRCP and FRE, the right of appeal, and the likelihood of rulings on dispositive motions before trial or hearing. Some defendants want delay and hope to wear out plaintiffs. Arbitration awards are not easy to research. Many clients still do not believe that arbitration is cheaper, especially when there will be a panel of three arbitrators. Finally, the perception persists that arbitrators will issue compromise awards.

Judge William G. Bassler:

The answer to this question has to come from experienced trial attorneys.
I know when I was on the bench I would hear comments that utterly surprised me: I would never let a client sign an arbitration agreement.
The comments to date suggest answers: arbitration is not always the best route to take.

Federico C. Alvarez:

Per my experience, parties seem to be motivated by two goals when they avoid or delay arbitration and also court ligitation. The first is that a party wants to avoid or delay an expected result. So this party will likely go to court to try to avoid the arbitration clause and then delay the arbitration wherever it can. This tactic may produce concessions from the other party in a negotiated resolution. If not, it at least defers the day of reckoning.
The second goal, related to the first, is that a party wants to avoid taking responsibility for or admitting to wrongdoing. This party will also resist the arbitration wherever it can, try to turn over every stone in discovery, and then want to appeal the decisions wherever available.
Since arbitrators can control delays a little better than courts, which are cautious of being reversed, parties with these motives will look askance at arbitrating, in my opinion.

scott link:

If the issue is solely a matter of time from answer to hearing it is simply a matter of caseload.In Texas, cases are "required" to be tried in 18 months from the answer. This has evolved into 'cases are required to be set for trial in 18 months from the filing of the answer". There is a new expedited trial schedule of cases in which the damages are less than 100k. Very few lawyers agree to this schedule. Bottom line, the expedited schedule of arbitration may decrease the number of cases an attorney or firm may accept because of the required focus needed for arbitration's abbreviated discovery deadlines. State and Federal courts are fairly liberal in granting continuances of 3 to 6 months. The longest continuance of which I am aware of from an arbitrator was 2 months. Mathematically, I could easily handle a case load of 50 good plaintiff cases in State Court, but only 20 or so in arbitration. This is one of several reasons the biggest opponents of arbitrations is the plaintiff's bar. The answers above discussed the issue of delay . thanks

Judge Gerald Harris:

I believe that a reluctance to arbitrate stems, in part, from the media's treatment of arbitration as an unfair forum imposed by powerful corporate interests upon weaker parties who are deprived of a choice. While that perspective is grossly skewed, it seems to be the prevailing view in the press.

David Anderson:

The reluctance to arbitrate is driven by a number of factors, which individually and collectively deter arbitration.

1. The owner has a “self-help” remedy -- hold the contractor’s money. The longer, more difficult and costly the dispute process, the better this self-help remedy works.

2. No appeal. A bad arbitration decision is fatal.

3. Arbitrators occasionally ignore the law. A court, in contrast, must follow the law (or subject itself to reversal). Construction contracts today are filled with conditions precedent, such as written notice.

4. Many arbitrators are reluctant to entertain, let alone grant, summary judgment motions – even where clear cut.

5. Arbitrators are viewed as more likely to split the baby than a court.


Eric Wiechmann:

Putting aside the reluctance of the trial attorney to give up his discovery and motion options, one factor that may be holding back arbitration is that the motivations of In house counsel or executives to add arbitration to a contract when it is being negotiated (cheaper, faster, somewhat confidential)differ when the actual dispute arises which has a greater down side then was even thought about during formation of the agreement and the General Counsel then regrets the limitations placed on his ability to defend the party's position and in the future will be reluctant to agree to arbitration. Large losses are not good for ones career. This can partly be addressed by customizing the dispute resolution processes in the agreement but these are usually thrown together at the 11th hour by attorneys who will not be responsible for the outcome.

David Andrew Byrne:

I'm glad that this study was done, and it highlights what many lawyers already knew -- arbitration is significantly cheaper, faster and gives a better result than litigation.

Microeconomic’s research report makes for hard reading. It is clear that U.S. court systems are deteriorating to the detriment of business, our national economy, and the public. Repairing the courts in our multiple jurisdictions is fraught with political and financial obstacles. While arbitration is clearly a better alternative an average of 11.6 months to award is too long. American Arbitration Association is in a unique position to address the situation.

Part of arbitration’s difficulties lies in its evolution over the past 25-years to become a clone of litigation. Discovery, dispositive motions, non-consecutive hearing days, and explained decisions create delays and increase costs. These trappings of litigation, in my opinion, do little to increase the quality of the process. Perhaps it is time for a major revision of AAA’s rules to bring arbitration back to the bare-bones model that was so successful for many years?

Labor-management grievance arbitration, though decreasing in volume owing to organized labor’s decline, continues to reflect AAA’s former motto of “Speed, Economy, and Justice.” The devastating series of articles in the New York Times, and attacks on arbitration in Congress and state legislatures show now is the time for change.

Posted by Pat Westerkamp

I concur with Mr. Anderson.

"2. No appeal. A bad arbitration decision is fatal."

What makes this more compelling is that SOME arbitrators, in my view, often ignore the law. A court, in contrast, must follow the law (or subject itself to reversal). Construction contracts today are filled with conditions precedent, such as written notice. So are no-fault cases with elaborate regulations that require correct timing as conditions precedent.

For example, I read on the community of one arbitration forum, a post of a no-fault arbitrator. Almost all courts deciding the issue went the same way. Her colleague told her that, and that he awarded in conformity with the law. Yet, she said she would go the other way because "it will be ok to do so" or something like that. Her reason was result-oriented.

No one would advise a client to arbitrate with arbitrators who don't follow the prevailing view in the law. Second, it will be tougher to get the award confirmed if the arbitrator did not follow the prevailing opinion in the law.

Yet, some forums seek to hire inexperienced arbitrators or those who do not attempt to follow the law. It is like a small "clique" of friends that are "in the group" notwithstanding their resistance to follow the law. Of course, mandatory diversity quotas may add to this issue.


"4. Many arbitrators are reluctant to entertain, let alone grant, summary judgment motions – even where clear cut."

I have heard this at a seminar. If your client is spending money for a defense, and there is no viable cause of action, why would you want to force the client to pay for an ENTIRE arbitration, when you could go to court and win summarily by motion? This prevailing view is simply not cost effective for your client.


"5. Arbitrators are viewed as more likely to split the baby than a court. "


Or even worse, be motivated by sympathy. after all, the company can afford to pay "something". I personally knew an arbitrator who told me he would "give the claimant a little something." That's great for the claimant. But the long term effect is that the company" is reluctant to use the forum in the future. To them, these awards encourage future baseless litigation and needless expenses.


I was a small-claims arbitrator for 20 years. I used the same standards I used to decide motions as a court attorney. Why? Because you want to encourage people to use the arbitrators.

Mike McConnell:

In each arbitration, there will be a losing party and no one in corporate America wants to own a loss. When looking for reasons for the loss, it is easy to blame the arbitrator who is not in a position to respond. Accordingly, myths arise such as "the arbitrator was the source of delay, the arbitrator split the baby, the arbitrator went outside the law", etc. It is very difficult to dispel these myths and unsophisticated parties may therefore be deterred to enter into arbitration agreements.

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