ARE YOU SAVVY ABOUT ARBITRATION?

Writen by John Burritt McArthur and Lawrence R. Mills^*

Using arbitration to resolve disputes has spread rapidly in the last few decades. The underfunding of courts and judicial docket congestion have pushed more cases from court into arbitration. With these cases come lawyers whose main background is in courtroom work. Some of the skills that play well in court do so in arbitration too. But arbitration rules offer lawyers opportunities that court rules of procedure and evidence do not. Proactive planning with the other side and careful attention to how to use arbitration’s informality can pay major dividends. Savvy arbitration lawyers know how to navigate arbitration rules and practices. This article discusses how to best do so.

The traditional benefits of arbitration are lower cost, quick resolution, avoiding juries (in cases not well suited to juries), confidentiality, and finality (no or extremely limited appeal). It was once common to discuss arbitration as if these benefits came at the cost of law-based outcomes. As the U.S. Supreme Court suggested in 1953: "Congress has afforded participants … an opportunity generally to secure prompt, economical and adequate solution of controversies through arbitration if the parties are willing to accept less certainty of legally correct adjustment." (Wilko v. Swann (1953) 346 U.S. 427, 438 [emphasis added].) During the misguided 30-year-long era thereafter, the court even denied arbitrators the right to decide important federal statutory disputes because it did not trust arbitrators’ ability to do so accurately. The court has repented of this criticism, and arbitration never warranted it.

In fact, sophisticated parties and smart lawyers know that arbitration, when used properly, often can bring a more fine-tuned justice than court litigation. Arbitration lets parties pick decision-makers with backgrounds best matched to the industry, technologies, and practices involved in a dispute. Parties have more say in the skill, wisdom, and collegiality of arbitrators than of judges. And parties normally have more input and can craft schedules customized to their dispute in a way often not possible in court.