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May 16, 2011

Sensitive Litigation Moment No. 14: Remember arbitration? How was that supposed to work, anyway?

Is there a way to stop feeding the monster? It's clear that both globally and in the U.S., arbitration and "ADR" have defeated the goals of Faster, Cheaper, Better. See, e.g., ABA Journal (April 2010) "International Arbitration Loses Its Grip". Any ideas on how to fix it? We need a system that works for clients--we already know it "works" for outside law firms--in business-to-business disputes. Why not have contract clauses that, regardless of the amount at stake, stipulate to one (1) panelist and require a decision in six (6) months?


Arbitration: Did it get as bad as the disease?

Posted by JD Hull at May 16, 2011 11:23 PM


Ah, the irony. As a kid I watched a great show in which Walter Cronkite talked about the gleaming promise of our future. "In the twenty-first century," he would say--and the projection or prediction about our awesome futures would follow.

I doubt Cronkite held forth on ADR. But the proponents of it did so with vigor. It became the equivalent of the jet pack for those of us who handle civil law disputes.

I am sure my bitter perspective on ADR comes from representing consumers and middle- and low-income individuals. But it has never been "better" or "cheaper" and rarely "faster".

For consumers, ADR means very high filing fees, no or little access to discovery, a decision-maker beholden to the institutional party that will agree (or not) to hire the professional for the next case, and exorbitant hearing fees. In short, mandatory arbitration has privatized the civil justice system.

One area of profound impact is that we have raised a generation of civil lawyers who do not know how to try cases. Trial skills are complex. They are mastered and maintained by trying cases. Nothing else gets you there.

So from my corner of the world, the "emperor has no clothes" moment about mandatory arbitration is a good thing. My take is that there is no real fix, other than making it truly consensual and limiting that consent until after the dispute arises.

Otherwise, I hope it dies. You may think I'm crazy. If so, riddle me this: Where is my jetpack?

Posted by: David Sugerman at May 16, 2011 08:42 AM

Really well said. Thanks. And you got me thinking. I'm still trying to make it work. So I'm crazier. Really.

Posted by: Hul at May 16, 2011 10:56 AM

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