Individuals soon realized that swift and simple justice is a benefit by, at best, no more than half the combatants in a case. Worse, in arbitration many times both sides thought they lost the same case. There is an element of reasonableness, of multi-perspective, of fresh air if you will, from a jury-decided case that you just can’t get from the decision of one, or three, legal representatives. To compound matters, arbitration proceedings are virtually un-appealable. Many court case losers take comfort in the fact that they can appeal the decision and possibly get it reversed, or at least ask for reconsideration of the judge’s ruling. For all practical purposes, no higher court is going to review testimony or evidence or law as a result of arbitration. Many arbitration clauses even contain the language of “binding arbitration”, where the parties agree ahead of time there will be no appeal or request for reconsideration. Short of misconduct by the arbitrator or plain mathematical miscalculation, the arbitration award stands without further review. Accordingly, since there can be no appeal based upon the arbitrator’s reasoning, the arbitrator is not required to even give the reason for his or her decision. All you get is the decision: I win…you lose…pay this money…case closed for good. Many individuals have come to find this justice a tad too swift and simple.
Then who still uses arbitration? An agreement to arbitrate a contract dispute is still the fastest and cheapest way to go. You will also see arbitration clauses in contracts between you and major companies (e.g. insurance). One reason big companies use arbitration is that arbitration is not a public proceeding. Hence, no public record of the decision. Another reason is that arbitrators are not permitted to award punitive damages. A major player can protect itself from a jury judgment of “punies” in a contract gone bad by inserting an arbitration clause. As long as you know what you’re agreeing to up front, you can use arbitration. Just be aware of what remedy is included in the contract, agreement, warranty, etc. If you don’t like it, request a change to the clause. Don’t agree to arbitration just because the pre-printed wording includes that remedy.