It has become apparent that many businesses that have gone through an arbitration that was both mandatory and binding – including those who pled to include such arbitration provisions in their own contracts – are now having second thoughts about the process. Many are finding arbitration to be both lengthy and expensive. Often they find that the sales pitch put out by the tort reformers that arbitration is quicker, cheaper and more efficient is far from true. Having to pay three arbitrators in some arbitration proceedings at rates that are from $500 to $10,000 per day is not too attractive to some of these corporations. Also, the lack of rules and procedures in arbitration often causes the proceedings not to go well. The lack of appeal rights and other enforceability issues continue to cause major concerns. Many times having to go to a court to enforce an arbitration order proves most difficult and adds additional expenses.
As arbitration has fallen out of favor, mediation, another alternate resolution method, seemingly is gaining traction among businesses. The mediation environment, which is less formal, tends to be cheaper, less adversarial, and quicker than an arbitration hearing. Also, it works, which I can’t say for arbitration. At a recent continuing legal education event for corporate counsel held in Atlanta, Georgia, David C. Vigilante, associate general counsel and chief litigation counsel at Turner Broadcasting, spoke. Mr. Vigilante reportedly told the audience that he’s not a fan of arbitration because the process requires companies to give up some legal rights – and it’s binding. He called mediation “the worthwhile companion to its less worthwhile …. arbitration.” I suspect more and more in-house counsel for corporations are starting to share those feelings.
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