• Embed Doc
  • Copy Link
  • Readcast
  • Collections
  • 2
    CommentGo Back
Download
 
Arbitration is a private-sector alternative to thegovernment court system. Compared with litigation,arbitration is typically quick, inexpensive, and confi-dential. It generally operates in a commonsense way,without all of the legal jargon and proceduralmaneuvering that go on in court. Unlike judges, arbi-trators are chosen by the parties to the dispute. Casesare resolved by respected professionals with techni-cal, as well as legal, expertise.Until recently, arbitration was confined to afew narrow categories of disputes. Those cate-gories are expanding rapidly because of a renewedemphasis on freedom of contract, which is thecentral principle of the Federal Arbitration Actand recent Supreme Court cases applying that act.Arbitration agreements now cover the broadrange of civil disputes among all sorts of parties,including consumers and employees. That opensup great potential for civil justice reform by fos-tering private-sector, market-oriented alternativesto the government court system.Unfortunately, trial lawyers are trying to killthose alternatives. Enforcement of arbitrationagreements is especially threatening to triallawyers because those contracts are the means bywhich disputing parties escape the litigationprocess that enriches so many lawyers.The trial lawyers’ fight against arbitrationreached the Supreme Court during the 2000–01term in two cases, one involving consumer arbi-tration and the other involving employmentarbitration. The trial lawyers’ lobby had hopedfor rulings that would effectively end enforce-ment of consumer and employee arbitrationagreements. Fortunately, the Supreme Courtreaffirmed arbitration in both cases, although itdid so by bare five-to-four majorities.Having failed in the Supreme Court, triallawyers are taking their fight to the halls of Congress. They support bills to end enforcement of large categories of arbitration agreements. Severalsuch bills have been introduced, and one recentlyadvanced out of the Senate Judiciary Committee.Enactment of any of those bills would squelch pri-vate-sector alternatives to the lawyer-dominatedcourt systems, violate freedom of contract, andraise costs to American business. While the billspurport to advance the interests of consumers andemployees, they would likely harm most of the peo-ple they purport to help.
 Arbitration under Assault 
Trial Lawyers Lead the Charge
by Stephen J. Ware
_____________________________________________________________________________________________________
Stephen J. Ware is a professor of law at Samford University’s Cumberland School of Law in Birmingham, Alabama..
Executive Summary
No. 433April 18, 2002
 
Introduction
Since the September 11 attacks on ournation, the public and its leaders have beenfocusing on terrorism and military action.With attention thus diverted, some specialinterest groups are quietly lobbying the polit-ical system to their advantage. For example,trial lawyers are backing a number of billsthat would help them tighten their grip onthe court system and restrict the freedom of people to opt for alternatives.The bill that is advancing most rapidlythrough Congress is the Motor VehicleContract Arbitration Fairness Act.
1
Its pas-sage would increase the chance that otheranti-arbitration bills will become law. Thus itis now time to assess the trial lawyers’ multi-faceted attack on arbitration.This paper begins with an overview of arbitration and the benefits it provides.Those benefits include savings of time andmoney, more knowledgeable adjudicators,and confidentiality. Current arbitration lawfacilitates those benefits by enforcing arbitra-tion agreements, regardless of whether theagreements are entered into before or after adispute arises. The paper then highlights thethreat to current, pro-contract arbitrationlaw. That law is under attack by trial lawyerswho would prefer to confine disputes to acourt system where they exercise more con-trol. The trial lawyers’ lobbies support severalbills in Congress that would render unen-forceable large categories of predispute arbi-tration agreements. To put it another way,those bills seek to deprive consumers,employees, and others of the power to enterinto binding predispute arbitration agree-ments. The bills are premised on the falseassumption that such power harms thosewho possess it.Careful analysis shows, however, that thevast majority of consumers, employees, andothers benefit from the power to commit toarbitration. Arbitration tends to reduce con-sumer prices, raise employee wages, andincrease access to justice for meritoriousclaims. Those benefits would not be fullyrealized if binding arbitration agreementscould be entered into only after a disputearose. Enactment of these anti-arbitrationbills would further enrich trial lawyers at theexpense of nearly everyone else.
Benefits of Arbitration
Arbitration is simply a private court. Justas Federal Express is a private-sector alterna-tive to the government post office for send-ing packages, arbitration is a private-sectoralternative to the government court systemfor resolving disputes.Arbitration is free enterprise. It is privatebusinesses competing for customers. Thebusinesses are those that provide arbitration,such as the American Arbitration Association,the National Arbitration Forum, and individ-ual arbitrators who “hang out a shingle” assole proprietors. The customers are peopleand organizations with disputes. Those cus-tomers have a choice, an alternative to the gov-ernment court system. The alternative is arbi-tration—which is actually not one but manyalternatives because there are many providersof arbitration and there are differences in theservices they offer. There are, however, certaincommon features that set arbitration apartfrom litigation in government courts.Parties using arbitration generally findthat it saves them time and money in com-parison with litigation. Arbitration is typical-ly quick, inexpensive, and confidential. Itgenerally operates in a commonsense way,without all of the legal jargon and procedur-al maneuvering that go on in court.To put it bluntly, what goes on in court isoften absurd. One need only remember theO. J. Simpson trial to appreciate the point.Furthermore, the Simpson case was a crimi-nal trial, which usually proceeds to resolu-tion faster than a civil trial.The procedures of civil litigation are slow,costly, and inefficient. Before trial, lawyers rou-tinely produce enormous amounts of paper-
2
The vast majorityof consumers,employees, andothers benefit fromthe power to com-mit to arbitration.
 
work. They write and file numerous pleadingsand motions. Those often-lengthy documentsare typically filled with legalistic jargon, techni-calities, formalities, and tedious repetition.The biggest source of cost and delay in civillitigation, however, is often discovery. Lawyersserve, respond to, and often argue aboutinterrogatories and document requests.Especially in high-stakes litigation, lawyersare prone to exchange boxes and boxes of doc-uments relating to the parties but too oftennot really relating to the case. Since broad dis-covery rules were enacted in the 1930s, tech-nological advances such as photocopiers andcomputers have caused exponential growth inthe number of documents and the burden of document discovery.After document discovery, lawyers contin-ue discovery with depositions of potential wit-nesses. That can involve teams of lawyers trav-eling around the country for months on end,with the lawyers often “on the clock” whilewaiting in airport lines or stuck in traffic. TheCommittee for Economic Development, anorganization of business and education lead-ers that addresses economic and social issues,estimates that discovery alone is 80 percent of the cost of a fully litigated case.
2
Other surveysof a wide range of cases estimate much lowerpercentages but nevertheless conclude thatthe litigation activity accounting for the mostlawyer time is discovery.
3
And, of course, thecost to the parties is delay as well as moneyspent on lawyers. A recent study of state courtsof general jurisdiction in 45 of the nation’s 75most populous counties found that the aver-age “length of all civil cases that reach a jurytrial is just over two and one-half years.”
4
In contrast, arbitration typically reducescosts. Arbitration gains speed and efficiencyby streamlining discovery, pleadings, andmotion practice. The streamlined process gen-erally results in much lower legal fees andrelated process costs. That is certainly thereceived wisdom about arbitration,
5
and whileempirical studies cannot prove it with certain-ty,
6
they conclude that process costs are muchlower in arbitration than in litigation.
7
At trial, there is an elaborate and compli-cated set of evidentiary and procedural rules.Lawyers spend time and money quibbling overthose rules. It sometimes seems that they talk about everything but the underlying disputeitself. In contrast, arbitration cuts to the chase.In an arbitration hearing, little time is wastedon technicalities. Instead, the parties tell theirsides of the story and the proceeding getsquickly to the heart of the matter.One of the reasons arbitration can do that,but litigation cannot, is that arbitrators tend tobe more knowledgeable than judges or juries.Arbitrators are chosen by the parties, oftenbecause of their expertise in a particular type of dispute. For example, the arbitrator of a con-struction dispute might be an engineer withexperience in the kind of construction involvedin that case. Such an arbitrator does not needto be brought up to speed on the technicalaspects of the case, the way a judge or a jurydoes. The pressing need to educate judges, andespecially juries, is so widely accepted that it isthe premise of several rules of evidence and hasspawned an entire industry of professionalexpert witnesses. That industry has grown tothe point that “it is the rare civil trial that doesnot present some kind of expert, such as a doc-tor, an accountant, a mechanic, or an engi-neer.”
8
But there are severe doubts aboutwhether jurors generally succeed in finding thetruth amidst the starkly clashing views of paid,partisan experts. In any case with technicalfacts—for instance, about engineering, medicalscience, or financial matters—it may be impos-sible to educate the jury adequately. It is simplynot feasible to send jurors to medical school orbusiness school so they will be able to under-stand the case.In contrast, arbitration allows parties tohave their cases resolved by respected profes-sionals who understand the nature and conse-quences of their rulings. Such arbitrators areunlikely to deliver the off-the-wall verdictssometimes issued by jurors. Arbitrators knowthat their rulings must be sensible if they areto be invited to arbitrate future cases. There isa built-in market constraint on arbitrator dis-cretion that is completely absent with respectto the discretion of jurors and judges.
3
Arbitration typi-cally reduces costs.
of 00

Leave a Comment

You must be to leave a comment.
Submit
Characters: ...
DavidDock84

I appreciate the concern which is been rose. The things need to be sorted out because it’s not about the individual but it can be with everyone. <a href="http://www.legalx.net/directory/categ...">Trial Attorneys</a>

reply07 / 07 / 2009
DavidDock84

I appreciate the concern which is been rose. The things need to be sorted out because it’s not about the individual but it can be with everyone. <a href="http://www.legalx.net/directory/categ...">Trial Attorneys</a>

reply07 / 07 / 2009
You must be to leave a comment.
Submit
Characters: ...