November 11, 2015 Articles

The Delaware Rapid Arbitration Act: Cost-Efficient Resolution of Business Disputes

By Charles E. Harris II and Sarah E. Reynolds, with Jeehee "Naomi" Yang

Legal practitioners and businesses once viewed arbitration as a faster, less expensive alternative to litigation. But this method of alternative dispute resolution has become protracted and costly as arbitration rules (and arbitrators) more readily permit broad discovery, dispositive motions, and other procedures that prolong resolution of a dispute. The Delaware Rapid Arbitration Act, Del. Code Ann. tit. 10, §§ 5801 et seq. (DRAA or the Act), effective since May 2015, creates an arbitration regime that is commenced in the Delaware Chancery Court—like a typical litigation—but for an arbitration administered by the court rather than an outside arbitration administrator. See also Del. Ch. Rules 96–98 (effective June 2015). Aiming to address the concerns of the legal and business communities about the speed and efficiency of arbitration, the purpose of the Act, as its name suggests, is "to give Delaware business entities a method by which they may resolve business disputes in a prompt, cost-effective, and efficient manner, through voluntary arbitration conducted by expert arbitrators, and to ensure rapid resolution of those business disputes." Del. Code Ann. tit. 10, § 5802.

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