GUEST BLOGGER RICK FREEMAN!

[ed. note: we’ve asked a number of our colleagues to offer guest-blogs about Texas dispute resolution, and our old friend Rick Freeman is the first to chime in. We look forward to continuing columns from Rick.]

I am honored to have been extended the opportunity to contribute to the KarlBayer.com blog. I know Karl Bayer and Rob Hargrove to be extremely talented and hardworking trial lawyers and dispute resolution specialists. I will attempt to provide some insight into the current status of the law, concentrating for now on the area of arbitration. Through these columns, over time, I hope to discuss different aspects of arbitration as I see them.

ARBITRATION AS AN EFFECTIVE DISPUTE RESOLUTION SYSTEM

As a trial lawyer with over 25 years of experience trying jury trials, I am quite experience in the dispute resolution system based on allowing 12 community members — considering only the evidence admitted pursuant to the Rules of Evidence and subject to the instructions of the trial judge — to decide claims that are brought in lawsuits. I personally prefer the jury system. But times have changed. There is clearly a large movement of individuals and businesses, supported by decisions of the highest courts of the federal and state judiciaries, who believe arbitration and not jury trial is the best way to resolve disputes.

In the last 10 years I have arbitrated a significant number of disputes. These include personal injury claims, employment claims, civil service claims, contract claims, and claims involving defective construction. My experience in these arbitrations leads me to believe that arbitrations can be an effective method to resolve disputed issues. By effective I do not mean that my client was always the winner. What I mean is that the arbitration process was ultimately deemed to allow each side to present its side of the dispute. And that, once the evidence was presented, the resulting arbitration award was clearly based on the evidence presented.

Arbitrations, without more, are neither good nor bad. A good arbitration is one that allows a fair determination of the parties’ disputed issues. On the other hand, a bad arbitration is one that, for whatever reason, does not provide a fair determination. Ultimately, the determination of whether arbitrations are an effective way to resolve disputed issues will be based on whether or not the parties feel that they got a fair opportunity to present their evidence on the disputed issues and whether or not the resulting arbitration award is based on the evidence presented.

To be an effective way to resolve disputes, arbitrations need to strive for fairness, both procedural fairness and substantive fairness. Since the lawyers for the parties are required to zealously advocate their client’s position, they cannot be expected to strive for this type of fairness. This fairness has to come from the arbitration clause provisions and the implementation of a fair system by the arbitrator. If the arbitration provision is fair and the arbitrator implements the arbitration fairly, arbitration will be an effective method to resolve the dispute.

We have this fairness in jury trials because the rules of procedure and evidence are known to all and the trial judge is required to follow proper procedures and fairly implement the rules of procedure and evidence. It the trial is not procedurally and substantively fair, it is subject to reversal on appeal.

With arbitrations, many times both the rules of procedure and evidence are not specified. Add to that that the great, great majority of arbitrations are binding. There is little or no right to appeal procedural or substantive rulings. Whether the arbitration provision is skewed to one side or the arbitrator fails to implement it properly, there is generally no ability to appeal the resulting arbitration award. If this occurs, there is a high likelihood that at least one party to the dispute will legitimately feel that the process was unfair and the resulting award is not fair. Arbitration fails as an effective method of dispute resolution if there are legitimate complaints about the fairness of the system.

In my next column I will begin to explore the types of fairness issues that need to be resolved in order for arbitration to be an effective dispute resolution system.

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