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Consider Arbitration in The Covid Era: benefits for construction, housing, and commercial disputes

April 21, 2021

The Covid-19 Pandemic, state and federal lockdowns, and consumer withdrawal from public spaces have changed the world. And resilient business people have responded by developing new skills and adapting to the circumstances. In light of the massive backlog of cases in civil courts caused by closures and capacity reductions, I encourage you to consider arbitration.

1. Courts are overwhelmed forcing commercial disputes down on priority lists.

Since March of 2020, State and Federal Courts have been operating at less than full capacity, causing staggering backlogs in cases. Many courts have shifted into a sort of “triage” mode – immigration courts hearing only detained dockets for months; housing courts hearing only evictions “for cause” due to moratoriums; and Civil courts pushing trial dates back by months, and more freely offering continuances. Everything but the Courts’ most essential or emergency functions have been slowed, if not completely postponed. If health, safety, or a person’s individual liberty are not at jeopardy, it isn’t a priority case, and Judges frequently push non-emergency matters far down on their calendars out of necessity.

Commercial disputes, from breach of contract to fraud, revolve around money. An unreliable contractor who doesn’t build to specifications may ruin a homeowner’s life, but seldom causes his death. A commercial tenant and landlord can nurse a dispute for years. But, because disputes about money can be cured by the payment of money, courts are more likely to view them as less urgent.

For parties, however, the damage caused by delay is still real and meaningful. When Courts are unable to help resolve dispute about jurisdiction, discovery, or applicable law, parties have the alternative of choosing a forum. And courts, generally, will respect these decisions.

2. Efficient inexpensive technologies are available for parties that are flexible.

Lockdowns, quarantines, and closures over the last year have forced virtually everyone to learn new skills related to remote meetings and virtual forums. This is good if you want to arbitrate outside of court. A Landlord living in India can participate in a housing court mediation in Massachusetts on equal footing with a former Tenant because everyone, even the judge, is at home or in their personal office.

Clients familiar with technologies like Zoom and Webex can view documents with you as you mark them up, which is often more efficient than a phone call alone. If evidence is properly assembled, moving through documents with parties and a designated neutral can be fast and virtually pain free, without the cost of travel and paying for a physical forum.

For cases where you want to “look the witness in the eye to see if he sweats” these may not be ideal circumstances—when dealing with parties that have a history of dishonesty or misrepresentation, for example—there are certain qualities that a physical forum offers that can’t quite be reproduced. You

don’t see when someone everts his eyes or hesitates, you can’t watch opposing counsel. But for cases that involve principally business disputes, conflicts about dates, evaluation of quality, professional opinions; for situations where parties that are open to stipulating documents and other electronic discovery; for situations where the better solution is to negotiate an answer but both sides are a shade too proud to bend to letters alone, these new innovations can be viewed as the silver lining on a dark cloud by creating a cheap forum that isn’t Court.

3. Arbitration is Flexible.

If you are considering a virtual forum, arbitration is a tool that is not merely equal to a court, but superior. When you go to a civil court, you have no ability to choose the judge. No choice in his or her background or qualifications. Nor are you able to determine when or how the proceedings will go.

But if the parties can discuss terms in advance, arbitration allows you to craft rules, calendars, and qualifications that guarantee that the issues are heard in the way the parties originally intend for them to be heard. I cannot stress enough how much impact your choice of arbitrator can have. If you have a construction fraud dispute, you can stipulate that your arbitrator be an architect, or a lawyer who has litigated at least 5 construction fraud cases, or that he or she reside in another state, or speak a specific second language (of great benefit in international commercial dispute contexts). If you know that your case turns on a deep understanding of a specialized technological issue or industry specific knowledge, choosing a neutral with relevant knowledge is an incredible opportunity.

Arbitration offers another benefit that some parties value tremendously: privacy. If your case is unique, you may not want to spend time in a forum where your issue must be resolved in perfect conformity with decades, possibly centuries, of precedent. Sometimes you just want to get things done, based on the facts, in a way that is fair. At other times, one or more of the parties is fighting because to lose would be a reputational injury, and that would be a greater would than the dollars-and-cents in controversy. Arbitration allows the parties to resolve things quietly, without creating public records or precedent. If you’re the plaintiff in a wrongful arrest case, or the victim of fraud who wants the world to know, this may not be a benefit for you. But if the parties are “respectable” businesses that have a disagreement, there is great wisdom in resolving it without fanfare.

It is true that choosing to arbitrate reduces the ability to parties to “fight” over the discovery of documents. But this is mitigated by the ability of the arbitrator to allow reasonable discovery and the necessarily inverse savings in time and tedium that go along with limited discovery. Again, if you’re an environmentalist plaintiff sleuthing out illegal toxic effluent discharges, you likely want and prefer the rigidity of court discovery. But if you’re two neighbors in a dispute about runoff from a home remodeling project, the depth of facts and documents may not merit the cost and delay of court.

And there’s always the question of juries. Courts are unique here in providing a jury of your “peers.” If you have any reservations about placing your legal questions of fact in the hands of a dozen strangers who would likely rather be somewhere else, please consider arbitration as a low cost and flexible alternative. These days, you might even be able to do it without leaving the house.