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My Shifting Stance on Arbitration

Arbitration may not be as bad as you think! One of the driving mantras I used to follow as a litigator who generally represents plaintiffs and the “little guy” was to avoid arbitration whenever I could. Today, having participated in a number of arbitrations and also jury trials, I have now come to a different conclusion, which is that for a number of reasons, arbitration may often be a better forum for your dispute's resolution.

First, even though --yes-- all sides of a dispute have to pay the arbitrator’s fees in addition to their attorneys’ fees, arbitration is nevertheless generally going to be a lot cheaper for the client who is represented on an hourly fee basis. This is because the amount of time, preparation, and work required of the attorneys is generally going to be substantially less in arbitration than it is for a jury trial.

A jury trial is a multi-headed hydra! We have a complex set of rules--some of which require extensive preparation--governing what evidence a jury can or cannot be shown. In practice, this means that every evidentiary point in a jury trial requires substantial research, consideration, and preparation. Contrast with arbitration, in which the evidentiary rules serve as more of a loose guide, depending on the arbitrator or course. In addition, jury trials are slow and are rife with a wide array of motions, many of which require the jury to file out of the courtroom just to get heard.

The point is, all of this and more means that the work investment (and thus hours billed) by counsel is going to be far less in an arbitration than it is in a jury trial. And that difference should more than make up for the additional fees that have to be paid to the arbitrator.

Second, just like the arbitration is less demanding on counsel, the arbitration is also less demanding on the client as well. Jury trials require extensive preparation on the part of the client, especially one who is going to testify, and this burden on the client is substantially reduced in arbitration.

Third, an arbitrator is likely to be a learned professional who is going to generally be far less easily swayed by emotion and prejudice. Juries are made up of laypeople, with little understanding of the law and with a limited capacity to process and synthesize a complex evidentiary matter. In other words, if the facts really are on your side but are otherwise complex and multifarious, the arbitrator will have a much easier time digesting the whole picture and will often more predictably reach the fair result you are looking for.

But make no mistake: There are nevertheless times when going to a jury trial is a far better bet, and this is especially true when the other side is backed by large insurance companies or is a large company. A strong case for punitive or extra-compensatory damages is one example of when you're likely better off with a jury. In general, arbitrators are known to take a far more conservative approach to awarding heavy damages that are calculated to punish the other side. Other times, the publicity of the trial is an advantage. There is also really no right to appeal an arbitration award. Discovery matters are far more limited in arbitration, a fact which is not to be lightly disregarded. Moreover, for the prepared and proactive counsel the court system can in a variety of ways give you more tools to control the case during the life of the litigation. And finally, sometimes you just need to “muck it up!”

If you have a piece of litigation that may be subject to an arbitration clause and you need to find out whether arbitration is the right forum for your dispute, the litigation team here at Asheville Legal is well versed in these clauses and has the experience and expertise to help you land in the right place. Give us a call today to find out more.


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