Corrections or additions?

This article by Bart Jackson was prepared for the March 21, 2001

edition of U.S. 1 Newspaper. All rights reserved.

Quick & Simple Justice: Mediation, Arbitration

Last year more than 198,000 businesses sought mediation

and binding arbitration as a cheaper, swifter and infinitely less

complex solution to contract conflicts than courts of law, with their

long-robed judges and legendary delays.

And, as with any settlement process, victory often lights on the

shoulder

of the most knowledgeable. To help managers understand the process,

professional arbitrator Kenneth Horowitz will conduct his two-part

course "Introduction to Commercial Arbitration for Small

Business."

Sponsored by Mercer County Community College, the course will be held

Wednesday and Thursday, March 21 and 22, at 7:10 p.m. on the West

Windsor campus. Cost: $40. Call 609-586-9446.

For the past 10 years, Horowitz has joined the 11,000 professional

members of the American Arbitration Association (AAA) to fill an

exponentially

growing need. "Our case load has doubled just in the last two

years alone," notes AAA’s communication director Alexis

Levenson.

"And we expect a continued rise in requests." Those interested

in using the services of AAA or learning more about them — or

even becoming an arbitrator — can contact the AAA’s New Jersey

office in Somerset at 732-560-9560; or the corporate headquarters

at 212-716-3976 (www.ADR.org)

The AAA seeks a broad scope of members who can bring their specific

business expertise to disputes either singly or as part of a

three-person

panel. After majoring in business at Fairleigh Dickinson University,

Horowitz, who lives in Manalapan, spent several years at Arthur

Andersen,

and then joined Cott Printing Corporation, where he was responsible

for labor negotiations.

"The advantages of working through binding arbitration are

many,"

says Horowitz, "which is why more and more contracts include a

`disputation settlement by arbitration’ clause."

Thrift. Compared to the courtroom, arbitration is an

incredibly

cheap arena. Usually cost are limited to renting a small office,

administrative

costs, and the $500 to $1,000 per day for the arbitrator. If it is

a complex case, the case may need a three-person arbitration panel.

Almost never do arbitration cases demand a recorder, though one party

may hire one and split the cost with its opponent or, on rare

occasions,

shoulder it alone. "Interestingly," says Horowitz, "these

costs may prove higher than actual court costs on an actual per diem

basis. But just wait until the attorneys arrive."

Lawyers charge by the hour, and substantial time must be spent on

common litigation tasks, including motion preparation, evidence

discovery

time, depositions, document production, preparation of speeches, and

of course the longer days at trial. While counsel may — or not

— accompany disputing parties into arbitration, they appear simply

to aid in argument presentation.

Swift Solutions. "Arbitration is quick," says

Horowitz. "A really long case may drag on for a month. In court,

a decision could take years — then face appeal." One

fascinating

reason for the speed of arbitration is the attitude of the disputing

parties. Typically both parties, along with the arbitrator, are

seeking

compromise, not victory. Both the supplier and his shipper, for

example,

want to get the goods back on the road; this is where they intend

to make their money, not through a legal judgment.

"This is not to say that the arbitrator does not make judgments

which declare a winner and a loser," Horowitz hastens to point

out. "We are not mediators trying to negotiate a workable

settlement

that both parties agree to."

Help from the arbitrator, in a relaxed atmosphere. The

courtroom, by design, is adversarial; the judge aloof. Arbitration

proceeds with ties loosened through three basic steps: opening

statements,

presentation of facts, and the summary statements. If one party brings

forth 100 invoices, each with the same complaint, most likely the

arbitrator will unite both parties, and get them to distill them all

into a single complaint. No official rules of evidence apply. The

arbitration panel may recommend to both parties a swifter, more

organized

method of argument presentation. Any agreed-upon means that leads

a fair decision is considered justifiable.

"There’s no, well, sleazeballs at these hearings," notes

Horowitz.

Those who seek to con a quick victory usually head for the court room.

In all his years hearing cases, he has never been offered a bribe.

Of course, some of the battles do get downright nasty. "You walk

into a room," Horowitz smiles "and you see a mother and

daughter

snarling at each other across the table in a partnership dispute .

. . you just say to yourself `boy, this can’t get good.’"

For that reason, arbitrators must remain as Caesar’s wife and keep

all extraneous conversation to a minimum. Horowitz even avoids such

comments as "Say, how about those Thunders?" for fear of even

appearing partial.

If you find yourself facing arbitration, or considering an

arbitration

clause in your contract, your best bet is to contact AAA and visit

a hearing. Get the feel, determine the need for counsel, and consider

potential ways of arguing a case. Horowitz adds one tip for managers

steeped in this multi-media age: Don’t go wild with presentation.

Power point slides may impress the marketing boys, "but by in

large," he laughs, "we strongly prefer content over form."

Also, be aware that arbitration is totally final and binding, and

it uses the same muscle of enforcement as do the courts. While appeal

is technically possible, Horowitz has never seen a decision

overturned.

"I suppose if the panel were incoherent and visibly drooling on

their decision papers, the verdict could be set aside," he says.

But it just doesn’t happen. While even a superior court judge can

have his ruling appealed if a mistake of fact can be proven, the

arbitrator

is not so subject to review.

Too often we hear resurrected the tired and quivering maxim, "the

government should run itself like business." Perhaps the dilemma

with our courts’ system is that it indeed does — embodying all

the sluggishness, politics and human error found in both fields. Yet

maybe the middle ground of alternative dispute resolution (mediation

and arbitration) can bring us a little closer to the swift and simple

vision that the aged maxim had in mind. And this might make business,

with all its inherent problems, run a little smoother for all of us.

— Bart Jackson


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