Federal and state courts often urge parties to use alternative dispute resolution (ADR) in order “to achieve more effective and efficient dispute resolution in a complex society.” ADR is favored since it is usually more economical with respect to time and cost. The court system and a well-developed private ADR industry are readily available to provide binding arbitration, mediation, settlement conferences and other processes.
However, the zeal by judges to employ the ostensibly streamlined procedures of ADR has led them to suggest having a dispute decided before a sitting trial court judge who is supposedly going to preside as an “arbitrator” and issue a binding award.2 In the two California cases discussed in this article, these awards were appealed, but not for jurisdictional reasons. The court of appeal had to raise the issue of whether a sitting superior court judge could conduct a private arbitration, which has different procedures from a court proceeding. The answer, not surprisingly, is no.
This article discusses these cases and some precautions that counsel and parties can take to avoid ending up in an “arbitration” that is, instead, a court trial without any right to appeal.
The Elliott Case
In Elliott & Ten Eyck Partnership v. City of Long Beach,3 the parties sued each other in connection with an oil and gas lease. They had a dispute resolution provision in their contract calling for two party-appointed experts and a third neutral expert. At a status conference, the supervising judge suggested that the parties have a sitting judge decide the case as an “arbitrator.” The parties agreed and settled on Judge Charvat as the arbitrator. Counsel made it clear at their first appearance before Judge Charvat that they had agreed his decision would be final and binding with no appeal.