Arbitration vs. Litigation: An Unintentional Experiment

By Cruz, Jeffrey R. | Dispute Resolution Journal, November-January 2005 | Go to article overview

Arbitration vs. Litigation: An Unintentional Experiment


Cruz, Jeffrey R., Dispute Resolution Journal


How often do you have the opportunity to arbitrate and litigate a similar case so that you can compare the processes? That opportunity presented itself to Jeffrey Cruz who shares his views on how the two processes stacked up.

Arbitration or litigation? Coke or Pepsi? Regular or decaf? Our choices and preferences are based in part on what we hear from others, but the more substantial factor in those choices and preferences is personal experience. Many of our clients already know that they prefer Pepsi and can't stomach decaf-but they have no preferences when it comes to dispute resolution because they have had little or no experience with it.

Recently, along with another practitioner, I spoke at a lunchtime seminar at our local American Arbitration Association (AAA) office1 to about a dozen commercial and construction arbitrators. We talked about our expectations as "users" of the arbitration process and recommendations for increasing the level of satisfaction that our clients have with arbitration. As a prelude to that discussion, we also talked about whether our clients were electing to include arbitration clauses in their contracts. Even with the recent boom in alternative dispute resolution (ADR), many clients are still unfamiliar with the arbitration process. Some of these clients are first-time owners of construction projects. At the contract drafting stage, they usually are preoccupied with breathing life into their project and feel trepidation about its launch. At this point in time, they are not inclined to focus on how to resolve future disputes with their designers and contractors.

Construction lawyers and professionals have all kinds of old chestnuts they like to dust off when asked to recommend a dispute resolution process for a contract. For example, some say that arbitration is better for subcontractors, litigation is better for contractors, or that you should arbitrate when your case is strong on the facts, but weak on the law. Others have it that you would be better off litigating when the contract is drafted in your favor.

Today it is vital to be able to advise clients on dispute resolution based on more than old chestnuts. The attorney's experience is perhaps the most important source of advice on this subject, although that is not the only source. Attorneys rarely have the opportunity to compare arbitration and litigation in the same case. That opportunity probably only arises in jurisdictions where a statute permits a trial de novo following a non-binding statutory arbitration.

A few years ago I found myself in the unusual situation of being involved in an arbitration and in a litigation of two roughly similar cases, the former in New Jersey and latter in New York. Although the amount in controversy in the New York litigation was much greater, the cases were close enough to be instructive on the advantages and disadvantages of using arbitration and litigation. This article compares key aspects of these two cases. This comparison is based, not on empirical research conducted under controlled conditions, but on my fortuitous involvement in two similar cases very close in time. In was simply one of those random opportunities that occasionally arise during the course of a legal career that allows the practitioner to make useful observations.

A Tale of Two Cases

1. Background of the New Jersey Case

The New Jersey case involved the design, construction and startup of a cogeneration facility owned by an independent power producer. My firm represented the owner against the designbuilder (called the EPC contractor-for engineer, procure and construct), which was contractually responsible for designing the plant, procuring all materials and equipment, constructing and then commissioning and turning over a fully operating plant to the owner. The owner's contract with the EPC contractor contained a warranty clause providing a one-year period from commercial operation in which to raise any deficiencies in the EPC contractor's performance. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Arbitration vs. Litigation: An Unintentional Experiment
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.