Doctors abhor lawsuits, and for good reason. Lawsuits consume time, energy, and money better spent on patients, they last forever, and their results seldom satisfy anyone. Which is why doctors, like other businesses and individuals, increasingly turn to arbitration to resolve disputes.
Arbitration is superficially similar to court litigation, but has several advantages. An arbitrator with expertise in the specific area of dispute decides the case, instead of a jury or judge. The procedures are more streamlined than litigation and there is no appeal, which means arbitration normally takes less time and money than court litigation. Court litigation is public. Arbitration is private.
Parties have to agree to arbitrate a case. Many contracts now have provisions requiring the parties to submit any disputes to an arbitrator. But parties can also agree to arbitrate a dispute after a dispute arises.
Because an agreement to arbitrate is a contract, the parties can agree just how they want the arbitration to be conducted. They can decide how long to take, what laws and rules to apply, and so on. This freedom to tailor the litigation process to the needs of the parties is one of the beauties of arbitration.
The parties agree on who the arbitrator will be. The arbitrator can be one person or a panel, usually of three arbitrators. The arbitration can be administered or not administered. “Administered” means that it is managed by an entity that provides arbitration services, such as the American Arbitration Association (“AAA”). The AAA helps the parties select the arbitrator and generally manages the progression of the case.
There are some drawbacks to arbitration. It is almost always binding. There is no appeal, and it may not be wise to give up that right. Another drawback can be cost. Courts are publically funded. Arbitrators work for hire just like doctors. Plus, the administrator charges to manage the case. If there are lawyers involved, they sometimes treat arbitration just like a lawsuit and go all out on discovery, motions, and other procedures that drive up the cost of litigation. If that happens in arbitration, as it sometimes does, then there is little to be gained by arbitrating. The parties get the worst of both worlds: all of the expense of litigation and the additional burden of paying the arbitrator and administrator.
But arbitration works well in most instances. The parties agree to submit the dispute to an arbitrator, they present their cases, and the arbitrator makes an award. And that is the end of it. The process takes months rather than years. The parties can then get on with their lives.
Robert S. Brandt is an arbitrator practicing with Trauger & Tuke. He served for twenty-one years as a Chancery Court judge before joining the firm.
