Terra Extraneus

In an effort to fulfill continuing legal education requirements for one of the states in which I’m licensed, I listened to a two hour panel discussion on this topic. I was struck by the seeming unwillingness of the panelists to actually answer the question. It seemed that the trial lawyers involved were afraid of losing the court system and its importance to their business success, rather than stepping back and looking at trends to see if arbitration might swallow the hallowed jury system.

For example, the panel did not consider the observation they themselves were making, that apparently fewer civil cases were being filed in their state, but that large municipal areas still could not produce a faster jury trial docket. Clearly, such circumstances confirmed that the civil trial system in their state was still under funded. The third branch of government, the court system, still gets less than 1% of all governmental revenues. As a result, the court system does not have the resources to modernize, to create new systems, or to adapt to the post-modern economy.

Arbitration, on the other hand, which is privately funded, can adapt to any type of dispute, anywhere at any time. Its rules can be changed by agreement of the parties to a dispute on the spot. If the parties cannot agree, they can argue to the panel the need for adaptation and the panel can adapt the proceedings to the dispute or simply default to whatever rules are at hand. Courts have no such flexibility.

With these two advantages, private resources versus limited public resources, and adaptability versus rigidity of process, arbitration will eclipse the civil jury trial system wherever contracts govern. Only strangers, without contracts or with contracts that do not contain arbitration clauses, will be left in the court system to work out their disputes.

Trial lawyers might not like it; but, the weight of history during the last quarter century is inescapable.