Arbitration Needs To Fix Itself If It Wants To Become A True Alternative

// Arbitration holds out a lot of promise. Shorter, cheaper dispute resolution in an era of ballooning legal costs. While “access to justice” is rightly reserved for discussing the barriers to meaningful relief for poor and lower middle class litigants, it’s a testament to how bad things have gotten that businesses have to consider the high price of litigating these days. Some people don’t like to talk about this because they think it distracts from traditional access to justice, on the other hand, if Fortune 500 companies are second-guessing litigation, imagine how insurmountable costs are for regular folks.

The flipside is the rise of mandatory arbitration agreements allowing companies to rob the people they screw over from access to the judicial system. The Roberts Court has made locking the courthouse doors the centerpiece of its jurisprudence. It’s not that there’s anything inherently wrong with arbitration, but for many litigants challenging corporate goliaths, being forcibly shunted to a less formal proceeding presided over by retired corporate lawyers leaves them without much sense of justice. And it’s irrelevant whether or not the proceeding actually gives the claimant short shrift — if they feel they aren’t getting justice, it’s not earning the public trust.

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Balancing the need for alternative dispute resolution mechanisms with public wariness is the challenge of the next generation.

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Which is probably why it’s fitting that I started thinking about this after chatting with New Era ADR CEO Collin Williams. We were talking about the company and how a group of former GCs from the startup world came together to build a platform to help companies efficiently resolve disputes digitally under a single roof — a sort of “telehealth for law.” As one might imagine this is one of those ideas that could have withered under the collective lack of lawyerly imagination until the pandemic forced the industry to come to grips with the possibilities.

New Era ADR works with arbitrators from the National Academy of Dedicated Neutrals, but Williams explained a vision of expanding the pool of qualified arbitrators to improve the discipline. “The current universe of arbitrators is dominated by retired practitioners. That means, demographically, older white men. To create a sustainable version of effective arbitration we have to grow the next generation,” he told me. After all, the sort of disputes heading to arbitration these days involve a hefty dose of tech fights and discrimination claims — diversity along age, gender, and racial lines all add to the process.

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Williams said the company is encouraging a new path to becoming an arbitrator beyond the retired side hustle — not that those arbitrators aren’t still important to the process, just not exclusively so. Going to firms and encouraging younger income partners and counsel, where we know high-quality diverse lawyers are often sent within the firm, to develop new lines of revenue building a book of business around presiding over arbitrations. And while arbitrators will need at least the level of experience that comes with a partner-level resume, law schools also have a role to play by planting the seed that this could be a realistic career path. To get students pointed on the right path to garnering the skills that could land them as an arbitrator with a respectable book of business serving as a neutral in, say, 15 years.

Because the price of litigation is only going to go up, and the pressure on legal departments to control costs are going to go up with it.

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Joe Patrice is a senior editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news. Joe also serves as a Managing Director at RPN Executive Search.

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Arbitration, In-House Counsel, New Era ADR, Technology