Gone are the halcyon days of arbitration guaranteeing a speedy and inexpensive alternative to court proceedings. We all have war stories of an arbitration (or two, or 10) that dragged on for years, plagued by extensive discovery followed by weeks or months of hearings, at a cost of millions of dollars. There are many reasons for this phenomenon, but one cause certainly lies in the fact that many companies are recycling in their contracts the same boilerplate arbitration clauses they first started using 30 years ago. Times have changed—litigation has unquestionably changed—and the quick, efficient arbitration of 1980 is simply not possible today unless companies start tailoring their arbitration clauses with an eye to the specific subject matter of the contract and the realities of 21st century litigation.
Arbitration is a creature of contract, and just as you would draft any other contract with provisions carefully tailored to your company’s specific needs, so too should you put such effort into drafting your arbitration clause. As a party to the contract, you are empowered to structure the arbitration process in any way you please. If you have an appetite for protracted litigation and relish the possibility that disputes under your contract will involve a comprehensive airing of every conceivable claim, with far-reaching discovery and exhaustive interim motion practice—just leave your arbitration clause silent as to these issues.
