Criticisms of mandatory arbitration

You can’t hear about law departments’ travails of cost control without hearing one of the perennial candidates; alternative dispute resolution (See my post of May 21, 2006 where it is ranked number 6.). Within the ADR quiver, mandatory arbitration is one of the proudest arrows (See my post of Dec. 9, 2005 about dispute-wise companies.).

But some law departments have found that the arrow neither flies true nor punctures the target. The ABA J., Nov. 2006 at 19, explains the process you sometimes need to endure just to enforce the right to arbitrate. Arbitration has also taken on the trappings of litigation, with discovery, expensive outside counsel, costs of arbitrators instead of a free judge, and lengthy hearings. Moreover, you can’t obtain summary judgment and many arbitrators merely split the difference, whereas judges decide a winner. Also, few disputes go to trial, so arbitration avoids something that is anyway unlikely to happen. One of the in-house counsel quoted in the article finds no marked difference in the speed of arbitration compared to litigation.

The article claims, therefore, that mandatory arbitration is waning, but mediation may be waxing.

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