'Evidence First' Arbitration: A Conceptual Framework for Arbitration Efficiency

AuthorWilliam G Horton
chapter six
“Evidence First” Arbitration: A Conceptual
Framework for Arbitration Eciency
WilliAm G horton
About ten years ago, I decided to become a full-time arbitrator.
One of the factors that moved me in this direction, after thirty
years of practising commercial litigation for national and inter-
national business clients, was a deep and growing dissatisfaction
with the ability of court-based litigation to deliver results that
were cost-eective, timely, or even, in many instances, reective
of the legal merits of the case.
As to cost-eectiveness and timeliness, it occurred to me that
there are few if any issues that arise in the business world for
which cost and time are secondary or irrelevant. The litigation
of business disputes seems to be a notable exception. Court cases
are regularly conducted on the basis that only a result achieved
through an arcane, lengthy, and laborious process can be viewed
as a legitimate outcome. Considerations of cost and time are sub-
ordinated to this belief, which is inculcated by counsel and read-
ily accepted by clients. It is, therefore, unsurprising that costs
routinely approach or exceed the economic value of the dispute
and that the resolution of the dispute is routinely delayed well be-
yond the point at which the utility of a resolution has signicant
WilliAm G horton
benet to the parties. In commercial disputes, access to justice is
dened not as much by the ability of the parties to aord the dis-
pute resolution process as by the ability of the process to deliver
a result at a reasonable cost and in a reasonable time having re-
gard to the business context. Furthermore, while cost may not be
a factor in commercial disputes with very large nancial implica-
tions, the timeliness of adjudication can be, and almost always is,
critical. In these respects, court litigation fails businesses in both
small and large disputes.
As to the results’ reecting the merits of the case, the fact that
cost and time regularly exceed what is justiable from a business
perspective means that as the litigation grinds on, pressure will
build to the point where one or both sides will seek a resolution
primarily to bring an end to the pain of the litigation process.
The parties may resort to negotiation or mediation. But in these
processes, the cost and ineciency of the litigation process itself
will gure prominently as reasons for bringing the dispute to an
end. Indeed, the problem of how to allocate litigation costs that
have dwarfed the original dispute often proves to be the main
Mediation may produce nality, but in the absence of an ef-
fective adjudicative process, the result produced by mediation is
more likely to reect the power balance, or imbalance, between
the parties and their respective abilities to absorb the costs and
delays imposed by the litigation process. Thus, the cost and ine-
ciency of the litigation process will be primary factors in shaping
the terms of a settlement.
Because commercial disputes are almost never concluded by
court litigation within the business cycle in which they occur,
settlement of a dispute will often be brought about not by the Her-
culean eorts and brilliance of advocates over a number of years
but by changes in the circumstances of the parties that have no
relationship to what has been occurring in the litigation, such as
insolvency, sale of the business, or developments in market condi-
tions or technology not to mention normal human events such
as death and reconciliation.

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