Muscular Arbitration

Today’s guest post comes from Harvey J. Kirsh, Esq., a JAMS panelist and recognized authority in construction law with 40 years of experience. He can be reached at hkirsh@jamsadr.com.

U.S. Supreme Court Justice Anthony Kennedy recently told reporters at a legal conference that the Supreme Court’s docket is more heavily oriented towards criminal and First Amendment cases, and that “a lot of big civil cases are going to arbitration.”  In Canada, the Chief Justice of the Supreme Court of Canada, Rt. Hon. Beverley McLachlin, has written that “the trend is clear: fewer and fewer construction cases are reaching the courts where the law is developed.  Increasingly, instead of being resolved by judges, construction disputes are being sent to mediation, arbitration, or other forms of alternative dispute resolution.”

However, despite what appears to be a trend, much has also been written about the shortcomings of arbitration.  In 2010, the College of Commercial Arbitrators (CCA) undertook a study of arbitration, and produced its landmark booklet, “Protocols for Expeditious, Cost-Effective Commercial Arbitration.” (In the interest of full disclosure, a number of JAMS panelists were involved in editing the Protocols.) Essentially, the Protocols observed that trial practices were being imported into the arbitration process and that arbitration was beginning to look just like litigation

The Editors of the Protocols ultimately concluded that lengthy discovery, excessive claims for document production, multiple depositions of witnesses, and numerous motions contribute to greater expense and delays in the arbitration process.  The primary recommendation was that “arbitrators must aggressively manage the process from day one of their appointment.”  The notion of “control,” particularly over the discovery process and the schedule, was paramount among their recommendations

In line with the CCA protocols, JAMS recently instituted new procedural options that allow the crafting of a process that is commensurate with the dispute. With JAMS new Optional Expedited Arbitration Procedures, parties can choose a process that limits depositions, document requests and e-discovery

At its recent Annual Meeting, the CCA characterized the controlled case management technique as “muscular arbitration.”  By way of contrast, however, a colleague recently gave an account of an arbitration where both he and the opposing counsel, as well as the arbitral panel, were content to proceed at a leisurely pace.  In response to my comment about muscular arbitration, he humorously coined the countervailing term “flaccid arbitration,” stating that, if that is what the parties want, then the arbitrators should respect and accommodate that approach.  I leave it to the reader to decide; but the weight of all recent literature seems to support the view that, in order to really make arbitration different than litigation, it is necessary for the arbitrators to manage the process efficiently and to move it forward.

The White and Case Survey

2010 was also the year that White & Case, in conjunction with the University of London, undertook an empirical survey of international arbitration.  The survey was based on questionnaires and in-depth face-to-face interviews of in-house counsel, who were found by the survey to have made most of the important strategic decisions.   The following were two of the interesting findings of the survey:

1. The respondents were asked their views about the cause of delays and who was responsible.  Most of them answered that it was the parties who contributed most to the length of the proceedings.  Delays, they responded, were caused by excessive discovery of documents, by the initial constitution of the panel, and by the arbitration hearings.  The respondents also stated, interestingly, that the arbitral tribunal should exert control over the parties to keep the process moving quickly.  The survey respondents wanted a disciplined, “muscular” process; an

1. A section of the survey dealt with the selection of arbitrators, and found that the most important factors were open-mindedness and fairness, and well as prior experience, availability, knowledge of the applicable law, and reputation.  But 50 percent of those surveyed stated that they were disappointed with arbitrator performance.

The Tarullo Survey

Another recent survey of a broad spectrum of construction project stakeholders, described in Michael Tarullo’s article (which will appear in the January 2012 issue of the JAMS Global Engineering and Construction newsletter), observes that, although arbitration is not without its faults, the majority of the respondents expressed the view that it is considerably more cost-effective than litigation in resolving construction claims.  They also stated that the process would be more appealing if it were managed more effectively, with limited motions and discovery, and with a reasonable but abbreviated timeline

“Muscular arbitration” may be an acquired taste; but it clearly appears that a “flaccid arbitration” process is not the preferred route to follow.