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Part 2: Business Litigation — Arbitration or Superior Court Trial?

On Behalf of | May 9, 2014 | Business Litigation

In last week’s Blog article we discussed the nature of arbitration and briefly touched upon some of the pros and cons of arbitration as an alternative to litigating a business litigation case in State or Federal Court.  In this follow-up article we will discuss the pros and cons of arbitration at greater length.

One of the hallmarks of arbitration is that there is generally almost no right of appeal.  The grounds for appeal in arbitration in California and most other states are very slight.  Essentially, one must prove that the arbitrator engaged in corruption, did not disclose a material fact that would cause a reasonable person to believe that the arbitrator had bias, or similar things.  Needless to say, this is very difficult to do.  Put simply, courts are very reluctant to disturb an arbitrator’s ruling.  This can be a good thing, since it allows the winner to achieve finality.  The loser cannot drag the matter out with a low-merit appeal, as sometimes happens.  On the other hand, if the ruling represents bad law or is otherwise questionable, there is usually little that can be done.

Parties often assume that arbitration is less expensive than trying a case in court.  Buffington Law Firm has arbitrated many types of cases, and in our considerable experience we have found that arbitration usually but not always entails more expense rather than less.  Arbitrators are usually retired judges and they charge by the hour.  A Superior Court or Federal judge is paid by the taxpayer.  Thus, if a case involves lots of pre-hearing dispute resolution, i.e. law and motion, this can involve pretty considerable arbitration fees.  On the other hand, some forms of arbitration rules limit discovery, can prevent discovery abuse, and bring the matter to a conclusion quicker.  Arbitration sometimes is a speedy and cost-effective way to litigate a matter.

There is no jury in arbitration–the arbitrator decides all matters of fact and of law.  For complex business litigation cases this is often a good thing.  Juries usually struggle with complex cases simply because they usually lack the experience and perspective for the type of controversy involved.  In arbitration it is often possible to agree upon an arbitrator who has the type of experience to really understand the case in depth.  This can prevent bogus arguments from gaining traction as sometimes happens in jury trials.  At Buffington Law Firm we believe in the jury system but we also think that there is a time and place for experienced arbitrators in lieu of a jury.

The decision to arbitrate versus litigate in court is a strategic decision that should be made with advice from an experienced litigation attorney.  If you are involved in a business litigation matter, a trust dispute, or a real estate lawsuit, we invite you to contact Buffington Law Firm for a no-obligation free legal consultation directly with one of our experienced trial attorneys.