June 01, 2015

From the Bench: The Private Jury Trial of a Business Case

Such trials offer the prospect of post-trial closure in a way not possible in the standard legal system.

In 21 years as a federal district judge handling hundreds of jury trials, I became convinced that they are an excellent way to decide a broad range of cases. Criminal cases and many tort cases—turning on issues of common experience—are usually cited as paradigmatic examples. But there are others too.

First, of course, when the issue involves what is reasonable or unreasonable, the decision reflecting the viewpoints of six, eight, or 12 laypeople inevitably adds a dimension and perspective lacking in the judgment of one decision maker, and thus may carry greater weight, especially when parties demand that kind of validation.

Second, the process of putting together a case that will be decided by laypeople imposes a discipline on the lawyers and the judge that is often relaxed in an arbitration or bench trial. The most obvious example of this is the tendency of an arbitrator or a judge in a bench trial to let in virtually all the evidence, knowing he or she can give it little weight if that appears appropriate. In a jury trial, by contrast, the judge is forced to apply the rules of evidence more rigorously to keep out testimony or exhibits that fail the standards of admissibility.

Third, the presence and participation of laypeople in the trial process forces the judge and lawyers to accommodate the reality that the proceedings are far from the main event in the fact finders’ lives. A certain distance from both the dispute and the process of resolving it brings a dispassion that reposes in those who are not at the heart of a controversy or its forum.

Despite these obvious benefits of jury trials, businesses often opt for private resolution of their controversies, usually through binding arbitration. Proceeding in the judicial system frequently entails disclosure and public airing of facts and business practices most companies prefer to keep private. Arbitration offers the advantages of privacy along with a binding decision—usually made by people chosen by the parties for their knowledge about or qualifications in deciding the issues at hand.

This makes sense for many, perhaps most, business disputes, but in some cases it may be preferable to replicate the decision making of a jury in a private forum, with its advantages of confidentiality, scheduling, and selection of the presider. This may seem puzzling at first. Handing over complicated issues of technology or commerce to people with no preexisting knowledge of the facts or the context involved—let alone no professional experience as decision makers—undoubtedly strikes many as odd.

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