Arbitration Trends 2014

A Today’s General Counsel survey conducted in July and August sought to capture trends and attitudes toward arbitration among in-house attorneys. The primary reasons respondents gave for choosing arbitration over litigation were that it was required by contract, it preserved confidentiality and it was less costly. The reasons given for choosing not to arbitrate included the difficulty of appealing the decision and the fact that the arbitration process is not required to follow established legal rules.

An accompanying article, based on survey results, notes that in-house attorneys are of two minds about arbitration. Asked if they thought arbitration generally turned out to be a better solution than litigation, 42 percent called it a toss-up. Respondents liked the less formal setting and the chance to avoid unfavorable courts and runaway juries, but they didn’t like what they viewed as the compromise verdicts that arbitrators sometimes render.

Executives of the two leading arbitration providers, the American Arbitration Association and JAMS, commented on the results. AAA’s general counsel said that data compiled by his company indicates there are several myths about arbitration, among them that arbitrators tend to “split the baby” with their verdicts. But according to the data all-or-nothing decisions are the usual result, he says

Executives of JAMS noted that the arbitration appeals process, like many other elements of arbitration, is governed by what contending parties agree on, and they first must agree on whether or not an appeal will be possible.