Comparing Cost in Construction Arbitration and Litigation - Chapter 30 - AAA Handbook on Construction Arbitration and ADR - Third Edition
Susan C. Zuckerman
Susan Zuckerman is an Attorney, and author of numerous articles on Alternate Dispute Resolution topics, including SDNY Declines Enforcement of NY Convention Award, DISPUTE RESOLUTION JOURNAL, 2/1/04; Construction: Who may serve as arbitrator, DISPUTE RESOLUTION JOURNAL, 5/1/02; Employment: Modified standard of review, DISPUTE RESOLUTION JOURNAL, 5/1/02; Oil and gas: Removal jurisdiction and the New York convention, DISPUTE RESOLUTION JOURNAL, 5/1/02; and Health care: Equitable estoppel, DISPUTE RESOLUTION JOURNAL, 5/1/02.
The key question everyone asks about arbitration is whether it is cheaper than litigation. The problem with answering this question is that rarely does one have the opportunity to arbitrate and litigate the same case. It is only possible under a statutory scheme providing for non-binding arbitration and allowing a dissatisfied party in arbitration to seek a trial de novo. The only other basis of comparison is the rare instance in which a lawyer has the opportunity to arbitrate and litigate two similar cases.
For this chapter, we asked three experienced construction litigators and arbitrators from different parts of the country—Joseph F. Canterbury, Jr., of Dallas; Christi L. Underwood of Orlando, Florida; and Howard D. Venzie Jr. of Philadelphia—to estimate the claimant’s cost of arbitrating or litigating in state court a hypothetical two-party construction dispute5 in order to see how they compare.
Wanting more than a cursory “bottom line” estimate, we asked our experts to first opine on how the case would be staffed by counsel and to set the attorney fee rate.