Cooper & Elliott Blog

Arbitration: A Valuable Tool for Business Dispute Resolution

Posted on Tue, Oct 9, 2018 @ 1:58 PM

Each victim’s case comes with a unique set of circumstances. Those circumstances dictate which method of resolution is best suited to achieve the desired results for both parties. In some personal injury and wrongful death cases for example, the dynamics are such that a settlement can achieve a better outcome for victims than a jury trial.

Arbitration is an alternative litigation option that we believe works particularly well for business dispute resolution—the perks being that arbitration can be more efficient and, in most cases, more confidential than a public trial.

What is arbitration?

Unless the parties agree otherwise, arbitrators’ decisions are definitive and binding like a jury’s verdict—and, they are rarely overturned on appeal. But what happens in an arbitration hearing differs in many ways from the procedures involved in a jury trial.

In arbitration, both parties present their cases to an arbitrator—or in some cases, a panel of arbitrators. The panel consists of experienced attorneys and it serves as both judge and jury for the case. Arbitrators render their decisions based on the evidence and arguments presented by both parties involved in the dispute.

There is no voir dire process in arbitration like there is in a trial. Nor is there a need to shape the presentation of a case to connect with the supposed values and attitudes of the jurors. Being familiar with the law, arbitrators are more likely to be swayed by evidence than emotional appeal.

There are some similarities between trials and arbitration as well. In both, motions can be filed, discovery is conducted, depositions are taken and presented, and expert witnesses can be brought to the hearing to testify.

Arbitration benefits for business dispute resolution

In a personal injury or wrongful death case, litigation can be part of a victim’s healing process. The public nature of a courtroom trial serves as an opportunity for victims to express their grief or anger, and to have their stories heard and decided on by their peers.

Privacy, on the other hand, can be preferred by both parties in business, shareholder or high-level employment disputes. Arbitration provides a legal forum for reaching a resolution without violating confidentiality. In most business cases, a contract has been broken or unfulfilled, and the arbitrators must determine whether genuine harm resulted and how the victim should be compensated. These types of cases frequently revolve around complex, intricate details. There may be proprietary or financial information involved that both sides would prefer to keep private.

Timeliness of arbitration

The other advantage of resolving a business dispute through arbitration is that it can bring the parties to resolution quickly. Courtroom judges are likely to have multiple court-related issues to handle in a given day, in addition to what’s on their court docket. It’s rare to have the judge’s availability for a full day, and this can extend the number of days needed to complete a trial. In an arbitration, the arbitrators booked for a hearing have no similar conflicts to disrupt the course of the hearing.

Because arbitrators are practicing attorneys or judges, there is less need for attorneys to devise complex presentations like those needed to demonstrate points to jurors who are less familiar with legal concepts. Arbitrators know the difference between hearsay and evidence, between showmanship and fact. This allows attorneys to get to the point and get through the case faster.

The value of knowing which method is best

Civil litigation attorneys must be adept at using all the tools available to them. They should be as skilled in arbitration and settlement negotiation as they are in the courtroom. Knowing which litigation method is most likely to meet the needs of the client and the circumstances of the case is key.

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The outcome of any client’s case will depend on the particular legal and factual circumstances of the case.

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