Volume 10, no. 4
The Arbitration Alternative
By Lawrence R. Mills
With the growing concern among lawyers that courts are unable to deliver the “just, speedy, and inexpensive determination” of disputes as envisioned by the drafters of the civil rules, why not stipulate with opposing counsel to submit some of your civil cases to binding arbitration? I’ve seen firsthand the considerable benefits achieved by choosing arbitration as an alternative forum for resolution of civil disputes.
Too frequently litigators limit their arbitration cases to “demand cases”—cases in which a preexisting contract contains an arbitration clause that requires the dispute be arbitrated. But virtually any case can be taken to binding arbitration—with or without a preexisting contract provision—if the parties agree to make it a “submission case” by stipulating, after the dispute has arisen, to arbitration.
Why choose arbitration? First, it can result in a faster resolution. Most arbitrations can get to a hearing and final award in six months or less, except in cases where the parties want it to take longer. Second, in arbitration you can get a firm hearing date instead of the theoretical possibility that exists in some courts where trial dates are uncertain and civil cases are routinely bumped to allow criminal trials to move forward. A third advantage to arbitration is confidentiality—parties can resolve their disputes without public scrutiny and ensure the confidentiality of the evidence, the hearing, and the result.
Another key advantage is that you can choose the decision maker. In a dispute involving complex or technical issues, you can select an experienced arbitrator in preference to a lay jury or an overworked and randomly assigned judge. Also, parties to an arbitration can agree on the prehearing procedures to be followed, making them as simple or complex as the participants wish.
Of course, arbitration has its disadvantages and may not be an appropriate choice in every case. A judge is “free of charge,” while parties must pay an arbitrator. There is no appeal in arbitration—which can be either a plus or minus, depending on the parties’ interest in a prompt and final resolution, but provides a solid argument for carefully selecting the arbitrator. In arbitration it is less common than in court for the arbitrator to decide a case on summary judgment.
Nevertheless, the advantages of arbitration make it an appealing alternative in many cases. But how do you convince your client, and the other side, to agree to arbitration? Many lawyers assume that, without a preexisting contract provision that compels arbitration, the likelihood of negotiating such an agreement is low once a dispute arises. It’s my experience, however, that both sides may conclude there are compelling reasons (although they may not be the same reasons) to submit the dispute to arbitration rather than take it to court.
Plaintiffs are most concerned with getting the quickest possible resolution of the claim, a firm hearing date, and a forum that reduces the likelihood of fatal summary judgment motions. Defendants are interested in eliminating the risk of an irrational, runaway jury verdict and in litigating the case in a confidential forum, out of the public eye. Both sides may share a common interest in having the dispute determined by a fair and knowledgeable decision maker within a reasonable period of time and without the risk of interminable appeals. Ultimately, each party will agree to arbitrate rather than go to court only if that party perceives the benefits of arbitration outweigh a trial.
Although the answer varies depending on the case, the question “Should we consider submitting this case to arbitration?” should always be on your checklist of issues to consider with the client and opposing counsel at the beginning of civil litigation matters.
Lawrence R. Mills, a former sole practitioner, is a business lawyer, mediator, and arbitrator with Mills Meyers Swartling in Seattle, Washington. Contact him at firstname.lastname@example.org.