Originally from Dispute Resolution Journal

Joyce George compares administered arbitration with ad hoc arbitration in the following piece. Her conclusion: parties are decidedly better off engaging the services of a reputable ADR services provider to help them manage the arbitration proceeding than winging it on their own. The road to successful arbitration can be hazardous for inexperienced parties without the appropriate case management support and guidance. George refers to the rules and procedures of the American Arbitration Association to illustrate the advantages of administered arbitration from start to finish.

Arbitration has been widely accepted as a viable alternative to litigation. Its hallmarks include efficiency, economy and privacy. However, by its very nature arbitration requires some form of agreement and cooperation between the parties. For this reason, if the structure of arbitration has not been previously agreed upon, attempting to obtain agreement once the dispute has erupted could be daunting.

Arbitration may take several forms. First, it can be court ordered. In such a case the court usually has the resources of administration and rules to guide the parties. Should arbitration fail the matter then proceeds to litigation?

Second, arbitration can be ad hoc, whereby it is agreed to and supervised by the parties alone. After the parties have agreed to arbitrate their dispute, ad hoc arbitration then requires continuous teamwork and cooperation. Therein lies the difficulty. The parties may feel that their cooperation can be easily interpreted as a form of weakness. This often results in an inability to move the process forward. Because the parties are already faced with a disagreement, the dispute, other decisions concerning administrative matters and procedures become more difficult to resolve.

Finally, to avoid litigation, parties entering into an agreement may provide that future disputes are to be resolved by arbitration. An arbitration clause usually names the organization providing the dispute resolution services, such as the American Arbitration Association. The AAA provides structure to the arbitration, including rules1 and administrative services2 to guide the parties. If the parties don’t have an arbitration agreement, the parties can agree to submit it to arbitration after a dispute arises. An agreement to submit the matter to the AAA for arbitration offers the advantage of a formalized structure and the avoidance of costly delays.