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New Study Provides Important Empirical Data on Arbitration

The private nature of arbitration means that there is typically less information available-- to lawyers, their clients, and the public -- about the practices and preferences of arbitrators.  A recently published study on arbitration, described by authors Thomas J. Stipanowich and Zachary P. Ulrich as "a wide-ranging, thoroughgoing empirical survey of practices and perspectives among experienced commercial arbitrators" sheds light on current trends in domestic and international arbitration.   

By way of background, more than 98% of survey respondents were age 50 or older and 84.6% were male. More than 80% of respondents characterized themeselves as former litigators -- an interesting statistic in light of the oft-cited complaint that arbitration has become too much like litigation.

Generally, arbitrators noted an uptick in international disputes and estimated that their caseloads would continue to expand to include an even higher percentage of international matters.  The practice areas making up the largest percentage of international disputes were contracts, intellectual property, and construction.  Technology, energy/utilities, and employment law were also prevalent.

In terms of differences between arbitration practice in the United States and abroad, the arbitrators surveyed cited the prominence of the International Bar Association's (IBA) Rules of the Taking of Evidence in International Commercial Arbitration, as well as a general observation that discovery tends to be more limited in international arbitrations. The study's authors noted that even if an arbitration takes place domestically, the presence of foreign parties makes it easier for arbitrators to place limits on the scope of discovery because of the influence of international discovery practices, which are very different than those found in the United States. Further, by using witness statements in lieu of direct testimony, arbitrators in international disputes often reach resolutions in a quicker and more cost-effective manner than in domestic arbitrations, where direct testimony is usually taken in person at the hearing. 

The study also presented data concerning arbitral panel composition (e.g., sole arbitrator vs. tripartite panels, multidisciplinary panels), ad hoc arbitrations, specialty arbitration procedures (e.g., fast track arbitration, baseball arbitration, appellate arbitration, bracketed damages awards, emergency arbitration), arbitration management, and settlement of arbitrated claims.

The complete study is available for download here.

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