A few months ago, Justice Anthony Kennedy commented that the Supreme Court’s docket "seems to be changing."1 The reason? "A lot of big civil cases are going to arbitration."2 My experience certainly conforms to Justice Kennedy’s insight that companies are opting for arbitration over litigation in big civil cases. Last year, for example, I sat on a panel involving two toy companies that had sued each other over two products. The sales of each of the products were, conservatively, hundreds of millions of dollars.3 The claims and cross-claims involved copyright and trademark infringement as well as breach of contract by the developers of one of the products who now worked for one of the companies. If one company won the dispute, the other company might be forced out of business. The press was following the case, and it had the potential to devolve into an acrimonious affair. And, to top it off, the companies needed the dispute resolved promptly in order to maximize the sale of the products for the upcoming year-end holiday season. Counseled by two of the best law firms in the country, the parties agreed to arbitrate the dispute pursuant to a schedule and protocol that counsel negotiated. The companies picked three arbitrators including one former judge from the district where the lawsuit was filed. The parties also opted to use appeal procedures that allow either party to appeal a final award to a panel of three new arbitrators.4 After streamlined and heavily managed discovery, both parties moved for summary judgment. As a result of this motion practice, the issues were narrowed and the parties received a full, written explanation of the panel's view of the law. After a nine-day hearing, while the panel was drafting an award, the parties reached a settlement that allowed both companies to continue to sell the products at issue. From start to finish, the above-described case took about seven months. Historically, there have been a number of reasons why lawyers have not chosen to arbitrate their case – some valid, some not. But, over the last decade, fundamental changes in litigation, arbitration and even the business world have caused many lawyers to consider whether arbitration may now be the better course for resolving their case.
Arbitration Can Resolve Disputes Faster Than Litigation
Arbitration Can Be More Cost-Effective Than Litigation
The Confidential Nature of Arbitration Can Keep Companies Out of the Limelight
Parties May Select Arbitrators with Particular Expertise
Parties May Design Their Own Appeal Procedures in High-Stakes Arbitration
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