Arbitration is an alternative to resolving disputes in court. The arbitration process allows the parties to select an individual or several individuals with expertise in the subject matter of the dispute to listen to the evidence and render a binding decision.
After ten years as a practicing attorney, I yearned for an opportunity to actually decide a case rather than advocating the position of one of the parties. Serving as an arbitrator allowed me to fulfill my desire to resolve disputes. Since my first appointment as an arbitrator, I have served in many cases administered through various arbitration organizations. In these instances, I have had the benefit of rules and procedures previously established by the administering organizations. I also have served as an arbitrator for cases administered by the parties themselves, during which I have had to devise my own procedures and methods for resolving the matter in dispute.
While there are many published court decisions which deal with legal issues arising from arbitration, I have found that these decisions offer little guidance to the arbitrator as to how to conduct an arbitration. The practical guidance that I have received has come from fellow arbitrators and personnel from the various arbitration organizations with whom I have worked. Over the years, I learned by doing and consulting with other arbitrators. I followed my instincts, reacted to situations, and refined my techniques. As an arbitrator, I have found a great deal of personal satisfaction in dispute resolution.
This manual suggests answers to one hundred questions a new arbitrator might ask concerning the arbitration process and the role of the arbitrator. It is not meant to instruct attorneys how to represent clients in arbitration, nor does it contain instruction for serving as a mediator, which is a different technique for resolving disputes. Please note that Question No. 101 is your question to ask me. I invite the reader to ask me any question that I have not addressed. I also welcome any other suggestions or comments.
The Myth And Reality Of Arbitration
The King gave the order, "Fetch me a sword". A sword was brought before the King and the King said, "Cut the live child in two, and give half to one and half to the other." I Kings 3:24-25.
There is a myth about arbitration. As an attorney, I heard it from clients and fellow attorneys. Not until I rendered my first arbitration award did I have personal experience that the myth was probably not true. Yet, the myth persists, usually in the following form: Arbitration? That's when you don't go to court, but pick somebody to decide the case informally, and you go and discuss it with the arbitrator and the arbitrator will usually "split the baby" - you know, give you at least half of what you ask for. This myth is not only factually inaccurate as it applies to arbitration today, but it is historically inaccurate as to the original dispute to which it refers.
The story of King Solomon's first arbitration does not support the arbitration myth. Let us first consider testimony of the witnesses in the original "split the baby" incident.
Two women came before the King. The first woman said "This woman and I live in the same house. I gave birth to a child and she gave birth to a child. During the night, her child died. She arose in the night and took my child, and laid her dead child on me. When I awoke to nurse my child, he was dead, but when I looked at him closely he was not my child." The other woman spoke. "No, the live one is my son, and the dead one is yours." But the first insisted, "No the dead boy is yours; mine is the live one." And they went on arguing before the King.
At this point, King Solomon rendered an interim award. "Fetch me a sword".
A sword was brought before the King and the King said, "Cut the live child in two, and give half to one and half to the other." In response, one of the parties requested modification of the award. But one of the woman pleaded with the King, "Give the live child to her, only do not kill it." The other insisted, "It shall be neither yours nor mine, cut it in two."
Faced with this additional testimony, King Solomon modified his award.
Then the King spoke, "Give the live child to the one who pleaded for its life - and do not put it to death; she is its mother."
It is important to note what King Solomon did not do. He did not split the baby! What then is the reality of arbitration? From the arbitrator's perspective, my personal experience is that in rendering an arbitration award, I do not "split the baby." In fact, I have never been tempted to do so. The parties are not looking for a simplistic 50%-50% compromise solution, or else they would have settled the matter themselves. If they do wish to compromise, they still may do so at any time after arbitration is initiated. In most instances, I have either granted a claim in full, or almost in full, or denied a claim in its entirety. Generally, in commercial disputes, if a party is correct in its position, and meets its burden of proof, it will prevail. If it is not correct in its position, or fails to meet its burden of proof, it will not prevail. In claims that consist of various smaller claims, some are granted and some are not. If the claim is not supportable, I deny it. I do not reward a claimant half of its claim for just "spending the time".
The reality of arbitration from the parties' perspective is that the parties will always know more about the dispute than an arbitrator ever will. They have lived with the situation until it evolved into a dispute. Even when the time arrives to make an award, the arbitrator may still know less than the parties know. In any situation involving advocacy, the trier of fact is left with the "spin" that the parties place on the facts. Even so, if the arbitrator has performed the duties of the position well, and taken appropriate steps to control the process so that the necessary information is submitted by the parties, the arbitrator can arrive at a reasoned, supportable decision. Your function as an arbitrator is not to give a party to the arbitration an "A" for effort, nor an "A" for anger and indignation. Your compassion for the situations presented to you must be tempered with objectivity. Your responsibility is to render an award based on the evidence. You may recall that when Solomon became king, he realized the difficulty of the decisions he would be required to make. His fervent prayer was for an "understanding heart."
