Further Ideas in Dispute Resolution: Consensus Arbitration

Allow me to depart from this blog's normal practice of blogging about co-resolution ONLY and then not blogging about anything for months at a time. More specifically, allow me to introduce you to consensus arbitration.

Consensus arbitration is a process in which the agreed-to arbitrator of the dispute does not write the award in isolation, but rather brings the parties together to discuss the shape of the award. The arbitrator would use his/her decision-making ability to guide the discussion (authoritatively, if necessary), but would otherwise act as a mediator. This would allow the parties to have a say in the specifics of the award and would allow the arbitrator to retain the ability to issue a final and binding decision.

This process is held out as the more natural and effective form of arbitration.

Under current arbitration practices, arbitrators imitate judges (by writing the award in isolation) even though their powers and functions are significantly different. Judges disseminate societal laws and norms upon everyone and, therefore, must be decisive and infallible. Also, judges preside over a completely thorough search for the Truth and, as a result, must weigh all admissible evidence in making a decision.

Arbitrators are different. Arbitrators are the predetermined resolvers of specific disputes between the parties and are described by the U.S. Supreme Court as an extension of the parties' negotiation or relationship--by entering into an arbitration agreement, the parties are presumed to have accepted, in advance, the arbitrator's decision, and the arbitrator is tasked with interpreting what the parties agreed to. Also, arbitrators preside over a more efficient/less thorough process and cannot be thought of as weighing as much evidence as a judge in rendering a decision. Finally, arbitrators are often chosen by both parties and, therefore, have incentive to appease both sides (whereas a judge is kept completely independent of the parties).

Thus, by imitating completely-decisive judges, arbitrators tend to render their own conceptions of acceptable compromises without consulting the parties. Instead, I argue, arbitrators should use their position as agreed-upon interpreter of the parties' agreement/negotiated relationship/best interests to act as a mediator who has the ability to render a decision.

To do this, the arbitrator would hear each side present their case (exactly as they normally do), but then, instead of withdrawing to write the award, would bring the parties together and mediate an agreement. And instead of acting as a detached, impartial mediator, the arbitrator would inform the parties of what he/she would be likely and not likely to put in an award, thereby guiding the parties to negotiate on the variables. This allows the arbitrator to retain influence and the final say, but also allows the parties to compromise and negotiate an acceptable resolution.

This process presents benefits of increased party satisfaction through control of/influence over the process. So why haven't arbitrators been doing this? Well, as it turns out, what I am describing as consensus arbitration used to be the normal method by which arbitrators render decisions. Prior to the acceptance of arbitration by the Courts in early-twentieth century American jurisprudence, arbitrators were described as a "mediator with a stick"--a person who consulted and advised the parties while retaining the ability to issue a decision. The change to a more legalistic, judge-like process occurred as the result of problems with enforcement of the arbitrator's private decision. However, today the Federal Arbitration Act and Steelworker's Trilogy (A New Hope, The Supreme Court Strikes Back, and Return of the Steelworkers) arbitration awards are fully enforceable and rarely overturned by state or federal courts.

Therefore, there is no longer anything preventing arbitrators from returning to their more natural, negotiated process. For further information on this process, read my article in Negotiation Journal (vol. 26 no. 3) or come hear my talk at the 2011 Fordham Law Conference on International Arbitration and Mediation. May the force (of arbitrators' decision-making power) be with you.