Time is Money: A Brief Overview of Expedited Arbitration
by Jade Hochberger
In the fast-paced world of an entrepreneur: time is money. This sentiment could not be more true than when an unexpected contractual dispute arises within your business. The more time it takes to resolve the dispute, the more money it will cost. This is why contracts often contain an Alternative Dispute Resolution (ADR) clause. The ADR clause outlines how to resolve disputes by way of mediation or arbitration. Arbitration is the process of resolving a dispute by use of an arbitrator rather than a court tribunal. Expedited arbitration, therefore, is the sped-up version of that. The decision to expedite the arbitration process may be partially written into the ADR clause, with or without other gating criteria such as size and suitability of the dispute at hand. Since courts and mediators take time [and effectively money], expedited arbitration is the fastest and most cost-effective option when addressing contractual disputes.
A fundamental understanding of the expedited arbitration route is that you will be trading up a broad scope of proceedings in exchange for speed. Therefore, the dispute at hand must be suitable for an expedited timeline. Suitable disputes might include early-stages or gating issues in a longer relationship, or a situation where both parties are motivated to get certainty and move on. On the other hand, a non-suitable dispute might involve high-stakes matters, existential threats or matters with broad impacts on numerous people.
TIPS TO AVOID SLOW-DOWNS
There can be only one - Select only one arbitrator. More than one arbitrator will slow down the overall process and has the potential to reduce final awards (source). Designating a standing or standby arbitrator, or greatly reducing the field of choice, may also help speed up the selection process.
Cooperation is key - Cooperation among all parties and counsel is crucial to the success and efficacy of an expedited timeline. The parties should reach consensus on any and all issues such as jurisdiction or cybersecurity protocol, before proceeding (get to the substance of the case).
The preliminary hearing is extremely important - It is during this hearing that all parties will deliberate and come to an understanding regarding all of the elements of the expedited arbitration process. It is crucial that all parties come prepared, and even more importantly, parties should leave the hearing in full agreement on their understanding of the rest of the expedited timeline. Involving party representatives at the preliminary hearing may also be useful in achieving shared expectations around scope.
Stay on track - A dispositive motion is intended to decide the claim in favor of one of the parties over the other(s). It is best practice to avoid or eliminate dispositive motions entirely. The only suitable time to bring them in is if the motion is highly likely to prevail and/or if it helps to focus the expedited timeline (narrowing the scope of discovery or the eventual hearing). In addition, arbitrators are expected to actively enforce limits and scope as established and agreed upon by all parties.
Prepare for the worst - In the preliminary hearing, establish a process for immediate and easy access to a tribunal to address any issues that the parties find they are unable to resolve via meet and confer (this will help to avoid a snowball effect).
An expedited arbitration requires that parties scope every aspect of the procedural timeline (discovery, pre-hearing, hearing, post-hearing) to what really matters with the facts of the dispute. Redundant information or side-issues will distract from the core concepts and cost everyone time (and money!) Time to award and types of awards will vary case by case.
The important thing to remember is that you cannot plan for every little thing. If your initial business agreement has an ADR clause, it should outline the nature of a suitable dispute as well as specific criteria that need to be met for an expedited arbitration to make sense. The more prepared you are, the more efficient the arbitration process will be, and the more time and money you will save.