Arbitration: Still an Effective Method of Resolving Business Disputes?

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In recent years, arbitration has come under increasing fire as an effective method of resolving business disputes. The primary criticism is that arbitration no longer offers the savings in time and money that the parties envisioned when they included arbitration clauses in their contracts. There are, however, steps that attorneys can take to save time and money and increase their clients’ satisfaction with the process.

Be realistic and involve the client from the outset. Many times parties are dissatisfied with arbitration because they have unrealistic expectations, often stemming from the arbitration clause. For example, an arbitration clause that allows extremely limited discovery and requires a final hearing in 90 days might be realistic in a fairly simple, low-dollar dispute, but is almost never realistic in a complex business dispute. Corporate counsel responsible for drafting arbitration clauses should seriously consider avoiding such limitations and, instead, allow their arbitration counsel the flexibility to craft a process appropriately tailored to the complexity of the dispute.

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