Sometimes, despite all of the parties’ best efforts – or in other cases, where one or both parties have no desire to settle, a case has to be litigated. Trials are costly, for reasons you would think of, and also, for reasons that most people don’t consider. A good rule of thumb is that for each day of trial, there will be one or two days of time for preparation. When you consider that both parties have to testify, as well as accountants, business appraisers, custody evaluators, real estate appraisers, employability experts, as well as a whole host of lay witnesses depending on the issues involved in a case, the actual known costs can be substantial.
The hidden costs are the time spent waiting around. Often times, you may be in the Courthouse from 8:30 a.m. to 4:30 p.m., and with interruptions, other matters and breaks, you only get a 3 or 4 hours per day of trial time. Additionally, it is not uncommon for trial dates to not only be non-consecutive, and sometimes, there are several weeks if not months between dates. I am currently in the midst of a trial where we had one half day in October 2007, another half day or less in January 2008 and another date scheduled for April. Each time you go back, you have to re-prepare.
While some cases that require a decision need to be arbitrated because the parties may not want to present certain issues to a Court, other cases that require a decision may be good candidates to avoid the above delays. Often with arbitration, you can select days if not weeks in blocks thus condensing the time that the process takes. In addition, without the interruptions that you will inevitably have in a court, the time spent at the arbitration can actually be spent arbitrating.
In advance of the arbitration, the parties can decide whether they want it to be binding (i.e. essentially, what the arbitrator decides goes) or whether there is a right of appeal. The parties can decide whether then want a court reporter present or not. The parties can even designate the scope of an appeal. While the arbitration act provides a very limited scope of review, parties can agree that the decision can be appealed for the same reasons as could a judicial decision be appealed. However, in what was made clear in a 2007 reported decision, the parties cannot confer jurisdiction to hear the appeal on the Appellate Division. Rather, the matter would have to be decided by the trial judge. Click here for a copy of the case.
I recently completed a more than 10 day arbitration and the experience was extremely positive, for all of the reason expressed in this post.
In any event, while there could be added costs associated with paying an arbitrator and court reporter, if the arbitration can be done more efficiently, if not more quickly, than a trial, it is a viable option in the right case.