Arbitration Models

BINDING MODELS

Complex Commercial Cases

To satisfy clients’ diverse needs, and to craft a setting more comfortable and responsive than the spare structure of most arbitration proceedings yet more streamlined than the elaborate procedures in courtrooms, AMERICORD provides unique rules for arbitrating complex commercial cases (Rules for Complex Cases).  The purpose of these rules is to:

·   simplify proceedings. AMERICORD encourages simple procedures for producing documents and for reducing or eliminating contested cases.

·   minimize transaction costs.  AMERICORD encourages use of a single arbitrator as the standard adjudication model, yet preserves the option of a three-member panel for apt disputes.

·   minimize clients’ concerns about arbitrators’ substantive legal or technical knowledge.  AMERICORD identifies individuals from our Panel of Adjudicators whose expertise and knowledge qualify them to hear particular disputes.

·   minimize disputes over selecting an adjudicator.  AMERICORD will designate from its Panel of Adjudicators a member to serve as arbitrator or “consensual special magistrate” (Private Business Court).

·   offer information to help parties guide future business practices. AMERICORD’s arbitrators will provide, unlike common practice, written reasons for their decisions

Smaller Commercial Disputes

AMERICORD has developed general guidelines and a simplified Agreement to Arbitrate for use in smaller and less complex cases. (Arbitration Guidelines). 

Variations on the Arbitration Model

AMERICORD works with parties to design a process best suited to the case, so may suggest variations on the standard arbitration model.  One example is “high-low” arbitration.  Parties agree in advance to resolve the dispute within a pre-negotiated range.  If the arbitrator’s decision falls outside the range, the closer high or low figure becomes the award.  If the award falls inside the range, the parties accept the award as rendered. 

Another variation is the “last best offer” used in baseball arbitration.  At the end of the arbitration hearing each party shares its “best and final” proposal for settlement.  Parties authorize the arbitrator in advance to select one of the proposals as the arbitration award.  The arbitrator holds no authority to make any other decision.

NON-BINDING MODELS

Advisory Arbitration

Although the essential process characteristics of non-binding arbitration are those of an adversarial hearing, its utility is as a settlement tool, providing a new frame of reference for subsequent negotiations.

Non-binding arbitration may be the preferred process where dispute finality is not essential, but the parties want a trial-type procedure and an objective, neutral evaluation on the case merits. The arbitrator’s subject matter expertise is almost as important as in the binding version of the process since the decision will predictably tilt the negotiation dynamics in favor of some parties over others. All participants should anticipate this effect if they chose advisory arbitration. The disadvantage of this process is that some parties may simply decide that the arbitrator’s advisory opinion is so disadvantageous as to further polarize positions, thus making settlement negotiations even more difficult than before.

AMERICORD’s advisory process can also incorporate the same “high-low” and “last best offer” elements sometimes utilized with binding arbitration.