Bespoke Litigation: An Alternative to Traditional Arbitration?

In theory, arbitration can offer an attractive alternative to traditional litigation. With discovery, motion practice, and judicial review limited, arbitration is intended to provide a cheaper, more efficient alternative to litigation. Unfortunately, arbitration of complex matters sometimes fails to achieve those goals. If not controlled by the arbitration panel, arbitration of complex disputes can take as long or longer than court adjudication of matters of similar complexity. The increasing prevalence of motion practice and broad discovery in arbitration is exacerbating the problem. Sophisticated parties and practitioners therefore often negotiate customized agreements that seek to limit the scope and contours of any arbitration. Others, leaving arbitration altogether, are inserting bespoke litigation clauses that seek to curtail some of the perceived inefficiencies of judicial proceedings.

Arbitration’s Challenge in Dealing with Complex Disputes

If arbitrations run off the rails, the wreck is often contributable to the complexity of the dispute. Sophisticated outside counsel bring the same tools of zealous advocacy to arbitration that they employ in traditional litigation, making arbitration procedures and practice complex and drawn out. The result is that—unless controlled by the arbitration panel—the scope and complexity of discovery can be similar to that undertaken in traditional litigation. Even motion practice, which traditionally is minimized in arbitration, can become a focus of pre-hearing activity in an arbitration. See, e.g., Richard H.C. Clay and J. Tanner Watkins, Methods for Cost Efficient Resolution in Arbitration, For the defense, August 2010, at 2.