Originally from Alternatives to the High Cost of Litigation

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In Part 1 of this article, we discussed the historical development of final offer arbitration—also called baseball arbitration and referred to as FOA— and the psychological underpinnings that explain its success.

Since its development in labor negotiations in the 1960s, FOA has been used in a wide variety of disputes and has been proven to enhance settlement prospects. See Erin Gleason & Edna Sussman, “Final Offer/Baseball Arbitration: The History, The Practice, and Future Design,” 37 Alternatives 1 (January 2019) (available at https://bit.ly/2LQCjrB).

Implementing this settlement-inducing, cost-saving, and efficiency-enhancing technique requires attention to process design. In this Part 2, we offer practical guidance, including a review of the various forms of FOA, best practices for drafting FOA provisions before and after the dispute arises, and guidance for structuring and facilitating an effective FOA process.