AS more companies turn to international arbitration, in-house lawyers are beginning to complain that the process can be just as costly and time-consuming as litigation.
At its best, alternative dispute resolution can save the company money and everyone time. But, at its worst, the process can take many, many years, and tie up in-house counsel and expensive external law firms in the process of resolution.
A new advocacy organisation in the United States is attempting to highlight the problems in what appears to be the preferred dispute resolution process of the future.
Corporate Counsel International Arbitration Group, launched three years ago, is composed of 50 large multinationals, including General Electric Company, Exxon Mobil Corporation and Siemens AG, to name a few.
As Corporate Counsel reports, the Group is just beginning to make its influence felt, highlighting problems in international arbitration and encouraging reform.
A member of the Group's steering committee, Ronald Schroeder, said no one he knows who uses arbitration regularly is happy with it.
Schroeder, who is a senior counsel in General Electric's headquarters, coordinates the company's arbitration policy. He hears the dissatisfaction from other in-house lawyers, which he told Corporate Counsel of well beyond the common complaint that arbitrators resolve disputes by splitting the baby.
WHile some of the more disappointing results many be victories technically, the financial cost and time cost are too high. An arbitrator will ask: "How can you be unhappy? You won!" To which Schroeder says: "Yeah, but it took six years. And it should have been two. Or six months."
Companies will often be lured to arbitration by an aversion to litigation. Some experts have labelled attitudes towards litigation as bordering on paranoia, seeing it as burdensome and too expensive.
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