As we’ve noted before, arbitration (and its neutered friend mediation) is a private replacement for civil litigation in court. Many parties consider arbitration when the local courts are slow, perhaps to get a private “judge” with some special expertise, or to stack the deck in favor of the party insisting on arbitration (like stock brokers, banks, and so on with mandatory arbitration before a panel of their choice in their non-negotiable contracts). Arbitration also can, in theory, provide more confidentiality than a public court.
Unfortunately, arbitration tends to be just as expensive and slow as court litigation in many instances. For clients considering arbitration of legal fee or even legal malpractice disputes, there are additional problems, like conflicts of interest: (1) most private arbitrators are paid by the hour, just like most lawyers, (2) most private arbitrators are former or current practicing lawyers, and (3) arbitration services (like JAMS or AAA) depend on lawyers to write them into their arbitration clauses. Arbitration of legal fee disputes with pay-as-you-go services and arbitrators is, in most situations, not in the client’s best interest. Continue reading