Business-to-Business Arbitration in the United States: a report of the Institute for Civil Justice of the RAND Corporation

Rand Corporation2011 | Mayo 17
The RAND Corporation is a US “nonprofit institution that helps improve policy and decisionmaking through research and analysis.” A division of the RAND Corporation, The Institute for Civil Justice “helps make the civil justice system more efficient and more equitable by supplying government and private decisionmakers and the public with the results of objective, empirically based, analytic research.”

On this occasion, The RAND Corporation has published the above-referenced report to highlight perceptions of corporate counsel regarding B2B arbitration in the US. The report offers nothing new. If anything, the report highlights what many reports confirm: legal operators the world over are dangerously tampering with arbitration as a concept and everyone is at fault. Let us review the report’s key findings.

The first key finding of this report indicates that most respondents feel that arbitration is “somewhat better, faster, and cheaper than litigation.” Somewhat!

A large majority of respondents (71%) feel that arbitrators tend to split awards, implying that they don’t like that.

According to most respondents, arbitration is, again, “somewhat” attractive, because it allows parties:

  • to avoid exposure to potentially uncertain or emotionally driven jury awards;
  • to have control over the arbitrator’s qualifications;
  • to keep the confidentiality of proceedings and decisions;
  • to obtain a better understanding (by the arbitrator) of complex cases and/or contracts.

What is it that corporate counsel dislike? According to the survey, the majority of respondents dislike not being able to appeal the award. It is certainly bizarre that finality, the most emblematic advantage of arbitration, is disliked by corporate counsel.

And that is that as far as this report goes. As the reader can see, the key findings are next to identical to key findings of numerous reports published over the past decade which we have reviewed and examined in these pages.

The whole point of RAND reports is to aid decisionmakers through research and analysis. How does this report help? Essentially by pointing out that unless perceptions change, any government effort to promote arbitration is next to useless, as “this trend will hamper efforts to reduce the burden on the courts and improve the civil justice system’s efficiency.”

Lastly, the report concludes indicating that its findings “raised more questions than it answered, but it also raises issues of concern for both policymakers and practitioners.” Isn’t that just great!

In-house and outside counsel are growing disenchanted with arbitration. Arbitrators and ADR organizations are worried. Can the conclusions of this and other reports shed some light? Yes: go back to basics. Instead of publishing “supplementary rules” for everything imaginable, stick to the basics. This is being screamed out loud and it is falling on deaf ears.

On the other hand, corporate counsel and outside counsel answer survey questions as if they had nothing to do with the current state of affairs. You can’t ask an arbitrator for extensive discovery of the “including-but-not-limited-to” nature, tag on e-discovery, and expect the arbitration process to be expedited. Of course it feels like litigation! You cannot ask for finality only when you prevail, and kind of miss an opportunity to have the award reviewed when dissatisfied.

As for arbitrators: Time to listen to what corporations are saying out loud. Many studies suggest that parties want an arbitrator that is both a learned jurist and a case manager. The case managing part of the equation is failing. It is time for arbitrators to get involved and call spade a spade, which is what parties are crying out for.

This whole state of affairs is turning into a travesty of…arbitration. Arbitration is there for a purpose. Parties, ADR organizations, and arbitrators are losing sight of what arbitration intends to accomplish. An attitude change on the part of all concerned is urgently needed; otherwise, this is going to go from bad to worse.

Paraphrasing Mr. Spock in Star Trek: “Remember”. So there, let us all remember what arbitration is all about. Then and only then can arbitration be an attractive alternative instead of the litigation alter ego it is becoming.

José Antonio García Álvaro | ARyME

Documentación relacionada:

Informes | Arbitraje

Business-to-Business Arbitration in the United States: Perceptions of Corporate Counsel [A 2011 report by the RAND Corporation]

Legislación | Arbitraje

An Act to make valid and enforceable written provisions of agreements for arbitration of disputes arising out of contracts, maritime transactions, or commerce among the States or Territories or with foreign nations [Approved, February 12, 1925]


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