A survey recently conducted by Today’s General Counsel asked US in-house lawyers about their thoughts on the pros and cons of arbitration, and options for mediation.
Factors perceived to favour arbitration
The results published in Arbitration Trends 2014 indicated that nearly half of lawyers surveyed normally choose arbitration over traditional litigation because it is required by contract.
In addition, 38 percent stated they select arbitration because it is less expensive than litigating a case and the process preserves confidentiality.
Limited discovery, a shorter amount of time to resolution, and arbitrator expertise also plays a significant role in whether in-house counsel opts to arbitrate a dispute.
Factors perceived to favour litigation
In contrast, two thirds of the lawyers surveyed said their primary reason for choosing litigation over arbitration is the difficulty of appealing an arbitrator’s decision.
Other factors that affected each in-house attorney’s decision to avoid arbitration included a perceived lack of arbitrator neutrality and “the fact that the arbitration process is not required to follow legal rules.”
Mediation: a third way?
A number of the in-house attorneys queried believe arbitration that is preceded by mediation is likely the best approach.