Originally from Alternatives to the High Cost of Litigation

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At its genesis and ascendancy, arbitration was touted as a speedier, cheaper, more efficient way to resolve disputes– especially when considered against the perceived drag of national court litigation.

Unfortunately, a common refrain in recent years has struck right at those advantages. With disputes becoming more and more complex, and tribunals ever more careful to cover all of the issues—no matter how small—in the fear that an eventual award proves unenforceable, arbitrations are taking longer and costing more than ever to reach their conclusions.

Escalation clauses–also known as multi-tier dispute resolution clauses–offer an elegant way out for both parties and tribunals. Parties agree to resolve their disputes progressively: going through a sequence of methods starting from the non-adversarial, non-binding (negotiation and mediation), toward the intermediate (adjudication, expert determination), and eventually to the formal (arbitration or litigation).