General Counsel, Fortune 500 company
Next time you're skimming through the boilerplate, take a moment to ponder that standard form dispute resolution clause. And if it talks about arbitration, you may want to read about Arbitration's Fall From Grace before you seal the deal.
It's not that arbitration is all bad. But its usefulness and popularity seems to depend very much on the circumstances, and who you're talking to.
Arbitration pros include:
- it can be quicker, especially if the courts are clogged up, like they are in, say, California
- it can be cheaper than heading off to court, although some argue that it is "penny wise, pound foolish"
- it can better than landing in a court system that you consider, well, "dodgy"
- some arbitrators bring special skills to the table that judges may lack, for example, engineering skills
- if one side challenges the arbitration clause, you might end up in court anyway
- you can't appeal if you don't like the outcome
- as one GC put it, "most arbitrators are not as good as most judges"
- mediation is better