Is Arbitration Economical? And Does it Matter?

The concepts of economy and efficiency are generally not front of mind when it comes to litigation.  Many people are quick to trumpet arbitration as being more economical and efficient.  But is it?

Well, as a lawyer, I have to say the answer depends.  Simply put, there are times when going into court is the better way to handle the resolution of a dispute.  Similarly, there are times when arbitration is the better way to handle the issue.  It all depends upon what the parties want.

 The ADR Times recently published a great article, “How Much Does Arbitration Cost?” that gives a really good overview of the costs of both arbitration and litigation.  But it misses one terribly salient point: the quality of the neutral.

 In most counties and states across the country, becoming a judge is simply a matter of running the best political campaign to get elected or having the best political connections for an appointment.  Earlier in my career, I watched a lawyer get elected judge without ever having tried a case and barely (by a matter of less than 60 days) enough experience to meet the legal requirements to be elected judge.  Last I knew, she did the better part of a year in federal prison.  Also, earlier in my career, I watched our governor appoint his old friend from the Slovenian Hall to become a judge so the friend could finish the remaining year of service he needed to earn his state-funded pension. 

 I had a teacher who used to say that the only people who were smart enough to run the country were too smart to get involved in politics.  I think there’s a certain part of that saying that spills over into arbitrations.  Professional neutrals are usually better and more qualified to hear your dispute than the average judge.  And they also tend to be more efficient because they’re not handling a docket with hundreds of cases on it.  Oh, and by the way, in court, the criminal cases take priority over your civil case. You don’t get that with an arbitrator.  Your civil case is a top priority with the arbitrator.

 Before you rally behind your favorite judge, yes, I will very readily admit that there are a number of unbelievably excellent judges.  And there are some arbitrators who, no doubt, leave a bit to be desired.  But, by and large, and painting with a broad brush, I believe that utilizing the arbitration procedures allows you a far better chance of getting a superior quality hearing than courts do.  To that end, does the cost really matter at that point?