In a trial, you are assigned a judge and a jury pool by the luck of the draw. In consensual arbitration, you choose the decider. This shift from state-imposed adjudication to consensual resolution is the primary reason arbitration remains the preferred method for complex trade and commercial disputes.
Arbitration is more formal than mediation—it is a process where the disputants voluntarily cede to a neutral third party the authority to decide the case. But while you lose the ability to control the outcome, you gain the ability to control the expert.
Pre-Dispute vs. Submission Agreements
Most commercial arbitration is triggered by a pre-dispute clause in a contract. However, savvy litigators know that they can also enter into a written submission agreement after a dispute has occurred. This allows you to tailor the arbitration process (the scope of discovery, the timeline, the expertise of the arbitrator) to the specific needs of that case.
Finality and Enforcement
The greatest asset of an arbitrator’s decision is its path to finality. Unlike a trial judgment that can be tied up in years of appeals, an arbitration award can be entered as a court judgment, making it immediately enforceable.
When you select an arbitrator who is a subject-matter expert—whether in construction, software, or real estate—you are ensuring that the person rendering the decision understands the nuances of the “trade” in a way a generalist judge might not. This expertise reduces the “risk of the ridiculous”—the fear of a jury award that makes no commercial sense.
Actionable Takeaway: The Consensual Arbitration Strategy
- Vet the Decider: Spend significant time researching the arbitrator’s past awards and their reputation for fairness within the specific industry.
- Customize the Process: If you are using a submission agreement, negotiate the rules of evidence and discovery to fit the value of the case.
- Focus on Finality: Remind your client that while they are giving up their “day in court,” they are gaining an enforceable end to the dispute, allowing them to return to their core business.
Consensual Arbitration is the professional’s choice for definitive resolution. I provide expert mediation services that respect the commercial realities of your clients’ businesses. Let’s connect for your next commercial dispute.
This blog is adapted from my unpublished manuscript on Alternative Dispute Resolution (ADR).
About the Author: Ken Strongman is a private commercial mediator/arbitrator of complex, high risk litigated cases since 2004. Disputes addressed include business, securities, construction defects, real estate, intellectual property, employment, environment, energy, and trusts & estates. He is also a Mediator and Arbitrator for FINRA, past president of The Mediation Society. and instructor at UC Law San Francisco.
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