The Arbitration Debate

Other attorneys, however, contend that deciding between arbitration and litigation isn’t necessarily an either-or choice. “Arbitration is an alternative that can be very beneficial if it’s well-suited for a particular case,” notes Roger Kramer, a partner with Gislason & Hunter, LLP, a law firm in Minneapolis.

“It really depends on the situation, whether arbitration is appropriate or not,” Broady adds. “It clearly, at times, is quicker and less expensive than a courtroom proceeding, and it can be a fair forum. So it certainly can achieve those goals.”

That said, it’s up to client and attorney to choose wisely.

Arbitration 101

Arbitration’s origins in the United States actually precede the American Revolution, when merchants in the British Colonies would opt to settle disputes in accordance with the rules of arbitration in Great Britian. These days, arbitration is an increasingly employed dispute-resolution tool for two or more parties who agree to resolve a legal dispute outside the courtroom.

According to Roger Haydock, managing director of Minneapolis-based National Arbitration Forum, an arbitration administration organization, many Americans—individuals and businesses alike, especially those with cases involving less than $60,000—have been priced out of the legal system, and arbitration has emerged as a more accessible option. “Arbitration developed because businesses, consumers, individuals, and companies wanted and needed a fair, inexpensive, quick, and effective civil justice system,” Haydock says.

In some cases, plaintiff and defendant jointly select a single arbitrator to hear both sides of the case and determine who wins and loses. Other times, each side selects an “advocate,” and these two opposing arbitrators select a third and work to generate a two-to-one majority.

Except in rare cases, the arbitrator’s ruling is binding and not appealable. That’s an attractive quality for those who want quick and absolute resolution to a dispute. “The specter of winning a jury verdict and having it appealed for two years and possibly taken away is horrifying for some people,” explains Linda Holstein, a partner in Minneapolis-based law firm Holstein Kremer.

Others, however, are more reluctant to essentially concede the right to appeal afforded them by the court system. “Especially if you are a defendant, and someone is suing you for a large sum of money, you would like to have as many procedural protections—and the right to appeal is a big one—as you’re entitled to,” Broady says.