Using Baseball Arbitration to Control Outrageous Outcomes

Alternative dispute resolution is premised on the concept of providing a more efficient and economical approach to resolve disputes.  While many active lawyers will tell you that arbitration is neither cheaper nor more efficient in its typical usage today, this is not to say that arbitration should never be used.  It is instead a call to be thoughtful about the dispute resolution process you select.  There is one unique form of arbitration that can be helpful in situations where an opponent has unrealistic expectations.

Baseball arbitration, which as you may have guessed originated in professional baseball, is being increasingly deployed in the commercial and construction litigation space.  In effect, the arbitration proceeds in the normal fashion to allow the parties to file their claims and defenses, complete discovery, and present their case to the arbitrator at a trial.  The unique and useful twist is that each party is then required to submit a proposed outcome to the arbitrator based on the evidence in the case.  The arbitrator is restricted to choosing one of the decisions outlined by the parties and cannot make an independent decision on the award.

This style of arbitration theoretically encourages the parties to be more realistic about the case – both the other side’s and their own.  A party overreaching in the proposed award may restrict the arbitrator’s “reasonable” options and allow the other side to win the day by proposing a result that more closely matches the evidence.  Having to select one of the parties’ proposals also prevents arbitrators from splitting the metaphorical baby and not really making any hard decisions on the matter.

As is often the case, parties using this method have to accept the downsides of the approach too.  For example, the final decision may not match the evidence in the case in any way if the arbitrator selected proposed award is inconsistent with the evidence.  This approach also does not eliminate all the issues with cost and efficiency.  

In the end, it’s important to know that there are options beyond the usual dispute resolution processes of court and traditional arbitration to get matters resolved.  The key is to think critically about the dispute in which you are involved and undertake the methodology that best fits the situation.