In cases where domestic arbitration for commercial cases is a choice, here are some reasons why arbitration offers a number of significant advantages over traditional litigation:

(A) SPEED: Pick your own timetable rather than spending countless administrative hours setting up motions or hearings, and waiting in court to be heard. Any disputes over timetables can be quickly resolved by the arbitrator;

(B) SPECIALIZED DECISION MAKER: Select one or three arbitrators that you trust to make a decision

and who may have the expertise in the field you are dealing with;

(C) PRACTICE AND PROCEDURE TO FIT THE FUSS: As long as you abide by the basics of natural

justice, you can select the process and procedure appropriate to the dispute. You need not be tied to the Rules of Civil Procedure. More importantly, you can have the arbitrator assist you in designing the kind of process that works for you.

(D) SAVE MONEY: Wait that can’t be right, can it? Doesn’t the client have to pay the arbitrator and the lawyers, and isn’t that more expensive than just going to court? If you conduct an arbitration as you would litigation, then that would seem correct. But arbitration is flexible and if you put your mind to tailoring an appropriate process, then the end result is a savings of money.

Here are some tips: 

1. Don’t bother with traditional pleadings:

Do a “Scott Schedule” of issues. Set out in the Schedule, the name of the issue, each party’s position and the documents or evidence that support that position. Ensure that the Schedule is a without prejudice document such that any amendments or changes, even including the withdrawal of admissions, are allowed up to the date of the hearing without procedural order. Experience demonstrates that as the lawyers work on the schedule, they will in time come to refine and narrow the issues and make the hearing shorter.

2. Get rid of fee shifting and Rule 49:

Radical, eh? Each side bears its own legal fees, and its share of the arbitrator’s fees, but does not bear the risk of paying two sets of fees in the event of loss. Why should the client bear two sets of legal fees if your prediction of success is wrong?

3. Smart Bomb discoveries:

The Rules of Civil Procedure provide for discovery plans, limited hours of discovery, and the like. Why not, with the arbitrator’s input, agree on limited discoveries on certain areas only, and return to discoveries in any other areas when you need to.

4. Bifurcate liability and damages or other issues:

Rule 6.1 has loosened the traditional judicial antipathy to bifurcation, but you still need consent or a motion. No fussing about this in arbitration.

5. Why are you sitting in court, scheduling court or triage court waiting to be heard on motions or other interlocutory relief?

Do your motions on the phone or in person at the convenience of counsel. Your client will save buckets of money just from the efficiencies resulting from the elimination of wait time. I often suggest that arbitrations take place on weekends, when time pressure is sometimes less.

6. You can mediate in the course of the arbitration:

Provided that your arbitration agreement so provides and safeguards contracted for. In my experience, most cases settle after the parties have led some evidence and have been subjected to cross examination.

(E) CONFIDENTIALITY: It has been said that the price of justice is eternal publicity. Does your client really want his or her name in a law report? (you do, but then again only if you win). Does your client want his or her business or personal affairs examined by a judge and exposed to the public? If not, arbitrate. You can even provide for appeal rights to other arbitrators to safe guard confidentiality.

(F) BINDING EFFECT: An arbitral award has the force of law behind it and can be enforced by the court system.

NOW HERE IS WHEN YOU SHOULDN’T ARBITRATE:

(A) If your client needs to vindicate a business practice, set some normative rule, or needs to set a precedent, litigation is the way to go.

(B) In a multi party dispute, it may be difficult to obtain the consent of all parties to agree to submit all disputes to arbitration;

(C) Certain kinds of cases may be deemed inappropriate for arbitration: cases involving constitutional, Charter, or public policy issues.

(D) There are always those clients who want to use the courts. Sometimes clients (usually defendants) see a strategic advantage in the time it takes to get a case to trial. As a final matter, here are some very creative ideas for those cases where the parties want the courts’ continuing or intermittent involvement in a dispute:

1. Appoint an arbitrator to be your case management and motion decision maker. The arbitrator is retained to deal with all administrative matters, including timing, the hearing of all interlocutory motions, and the like. In other words, let an arbitrator act as your private Master’s office. Leave the trial to the courts;

2. Pick an important issue to arbitrate and leave the balance of the issues to the court process. For example, it may make sense to have a gateway or threshold liability issue (say construction or interpretation of an agreement) determined by arbitration, leaving the quantification of damages to trial.

For more information on this topic, please contact Gary Caplan.

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