Intro to Arbitration (Oct 14)

•While mediation is essentially an assisted form of negotiation...

•Arbitration more closely resembles litigation

•But arbitration is still designed to be a
streamlined, quicker path to resolving disputes than traditional litigation

•Arbitration has continued to evolve to more closely resemble litigation, with the same drawbacks, that it was originally expected to avoid

•Initially, arbitration was characterized by an informality not present in litigation (rules of evidence, burdens of proof, etc.)

A form of adjudication in which the decision to adjudicate is made by contract between the disputants

The "neutral" who hears the submissions of each disputant for the purpose of resolving an active conflict (i.e., not latent)

The BINDING decision issued by an arbitrator

•Agreements to submit future disputes, not currently in existence, to arbitration

•Note: Agreements may be made either by the parties, or some entity agreeing in advance on their behalf (i.e., collective bargaining)

•Formality and rigidity of the process

•When a contract to arbitrate is formed

•Who controls the process and provides support

•Transaction or dispute focus

•Private or public sector

•Varities that restrict the nature of the arbitrator's award

•Bindingness of the arbitration award

Characterized by minimal participation by lawyers, minimal discovery, procedural rules, or rules of evidence. Arbitrator may act in a facilitative manner

Arbitration marked by intensive participation by lawyers and by the same sorts of formalized and rigid procedural and evidentiary rules as are characteristic of litigation. In its extreme form, almost identical to litigation

•Agreement to arbitrate predates dispute

•Often, agreements to arbitrate are contained in dispute resolution clauses of substantive contracts

•Agreement to arbitrate made after a dispute arises

•Parties agree, in response to the dispute arising, to find an alternative to litigation to resolve conflict

•Generally found in labor arbitration

Interest arbitration:
•Settles collective bargaining transactions

Rights arbitration:
•Deals with disputes such as unfair labor practices complaints

Not under auspices of public sector

Nonbinding evaluation process under court auspices/supervision resulting in advisory arbitration award

Privately hired judge (retired) or referee provides arbitration with legal impact identical to that of litigation

•Not arbitration in the conceptual sense, since it is nonbinding

•Losing disputant has a right to a trial de novo
- Retrial of a previously decided dispute, in which all of the legal and factual issues may be relitigated and redecided
- Trial de novo is in contrast with an appeal, in which only errors of law can be the basis to change the outcome

High-Low

Final-Offer (baseball) Arbitration

Night baseball arbitration

Arbitrator's decision is restricted to a range of possible outcomes by prior agreement of the disputants

Arbitrator must choose between the final settlement offers propounded by the disputants

•Variant of baseball arbitration in which the arbitrator renders a decision without knowing the final offers

•The award is the final offer closest to the arbitrator's decision

Arbitration in which the outcome is binding on all disputants ("true arbitration)

Nonbinding evaluation in which the disputant who rejects the evaluator's decision is subject to a penalty

Nonbinding evaluation in which the evaluator renders a decision, which may be rejected without penalty by either disputant (not really arbitration in the true sense)

1. Creating the arbitration contract
2. Demanding, choosing, or opting for arbitration
3. Selecting the arbitrator or arbitration panel
4. Selecting a set of procedural rules
5. Preparing for arbitration
6. Participating in the arbitration hearing
7. Issuing the arbitration award
8. Enforcing the award

1. Goal is to minimize the likelihood of gratuitous dispute escalation
• So, agreement to arbitrate should be as clear and as simple as possible
• Should anticipate future developments
• Should be fair and equitable to both sides (i.e., not unconscionable)

2. Matters to be arbitrated should be set out explicitly

3. Expenses of arbitration should be shared (but not if its unconscionable)

4. Contract should set forth the arbitrator's qualification and means of selection
•I f selecting a panel, never use an even number
5. Contract should specify whether discovery is permitted
6. Arbitration hearing(s) and duration, may be either scheduled or left to discretion of arbitrator
7. Contract should address privacy and confidentiality, including transcripts

•8. Arbitrators role in the process should be clarified
•Judicial or facilitative? Hybrid process (mixed with mediation)?
•9. Which rules of evidence, if any, will apply?
•10. What documents will be accepted by the arbitrator?
•Briefs, law and authorities, etc.
•11. Contract should specify the nature of the arbitrator's award
•Will it only state the outcome, or would reasons in support be required?

12. Contract should spell out the scope of reviewability and enforcement
• Generally, prevailing law in the jurisdiction dictates this, but contract should spell this out clearly as well

13. Choices of law
• If disputants are from different states or countries, the contract should spell out which jurisdiction's laws will apply to resolving the dispute

14. Provisional remedies:
• Such as preliminary or temporary injunctions while the arbitration is pending
• Contract must explicitly provide for these, which can only be granted by a trial court (arbitrator is limited to resolving the dispute)
• Arbitration agreements take away a court's power to intervene until after arbitration, so agreements which allow the court to act while arbitration is pending must be clearly stated


Do the parties first want to consider mediation?
• If so, include a provision requiring it