Settlement of Cases in Arbitration

Commercial Arbitration and Settlement: Empirical Insights into the Roles Arbitrators Play
by Thomas Stipanowich and Zachary P Ulrich, both of Pepperdine University School of Law

Abstract
A wide-ranging new Straus Institute for Dispute Resolution Survey of experienced arbitrators, conducted with the cooperation of the College of Commercial Arbitrators, reflects the growing professionalization of commercial arbitration, increasing competition for cases, and many other trends in arbitration practice. It also shows that a grower percentage of arbitrated cases are being settled prior to award or to the start of hearings, and offers a strong rationale for greater emphasis on the role of arbitrators in setting the stage for or facilitating settlement. Early settlement of a dispute can be a uniquely effective way of minimizing cost and cycle time in dispute resolution, but the role of has not been given significant attention. Survey data indicate that the incidence of settlement varies widely among arbitrators, and suggest that some experienced arbitrators do not perceive their arbitral role as extending to the promotion of settlement. On the other hand, many experienced arbitrators are conducting themselves as proactive managers of the case before them, and many perceive a connection between their activities and settlement. One of the most effective means by which arbitrators “set the stage” for settlement is by ruling on dispositive motions. Other arbitrators have taken more direct action in facilitating settlement, sometimes by serving as both a mediator and an arbitrator with respect to a dispute. This article considers the function of settlement in the quest for economy and efficiency in dispute resolution and various approaches aimed directly at promotion of settlement, such as stepped dispute resolution, creative variants, and “med-arb.” It examines ways in which techniques featured in recent initiatives promoting more cost-effective and expeditious arbitration may also lay the groundwork for settlement; in addition, it explores the more contentious proposals put forward by the CEDR Commission on Settlement in International Arbitration. The article summarizes new Survey results showing a recent increase in the incidence of pre-hearing and pre-award settlement in arbitration, as well as Survey responses reflecting experienced arbitrators’ differing perspectives toward their role respecting informal settlement. Among other things, it focuses on the activities some arbitrators regard as setting the stage for settlement, particularly their handling of dispositive motions in arbitration; it also briefly considers the more controversial approach involving a single individual serving the dual roles of mediator and arbitrator. It concludes with straightforward proposals to stimulate appropriate involvement by arbitrators as well as attorneys and other “stakeholders” in setting the stage for settlement.

Amex v. Italian Colors and the "Effectively Vindicate" Doctrine

Good article by St. Mary's Law Professor Ramona Lampley  who writes that the Amex case calls into question the very existence of the “effective vindication doctrine.” She argues that to effectuate both the FAA and other statutes courts should compare the costs of arbitration to the costs of proceeding in litigation.

Is Adjudication a Public Good?: 'Overcrowded Courts' and the Private-Sector Alternative of Arbitration

This article was published in  Cardozo Journal of Conflict Resolution, Vol. 14, 2013
 It asks which disputing parties deserve subsidized adjudication which should have to pay market rates for it? Our society’s failure to confront this important question allows all disputing parties to pursue the subsidy for themselves. The result is that parties who do not deserve the subsidy — parties who should be paying market rates for adjudication — are consuming public resources that would be better spent on parties who do deserve the subsidy.

One way to end the public subsidy for cases that do not deserve it is for courts to charge the parties to such a case a fee high enough to reimburse the court for its costs of adjudicating the case. Such “user fees” have been proposed by several thoughtful commentators. This article assesses those proposals and suggests that user fees would make litigation look more like arbitration. This article concludes by considering the possibility that the public-sector court system and private arbitration organizations could compete in the market for unsubsidized adjudication and in the market for subsidized adjudication. In short, this article places discussions of overcrowded courts and court user fees in the context of a society — our society — with a strong private-sector alternative to our courts.