Time Savings IS Cost Savings in Dispute Resolution

Benjamin Franklin famously wrote in his Advice to a Young Tradesman: “Remember that Time is Money.” This principle holds true with full force in dispute resolution.

Arbitration is less expensive than court litigation precisely because arbitration cases almost always move faster than lawsuits filed in court. The key driver of cost savings is the fact that parties spend less time burdened by the ongoing costs of dispute resolution – such as attorneys’ fees, discovery expenses, redirection of resources, etc. – when parties are in arbitration.

The time-efficiency advantage in arbitration is substantial. American Bar Association research suggests that the average duration of an arbitration case is about seven months, while court litigation can take from 23-30 months, depending on the court schedule.

It is worth examining why this is true by looking at specific FORUM arbitration rules that generate time efficiency and ensure that FORUM arbitration is less expensive than court litigation and less expensive than arbitration with other providers:

• FORUM charges only flat fees to file and respond to a case, and these fees are only collected as the case reaches administrative milestones. FORUM’s filing fee is collected upon filing and the administrative fee is collected prior to the appointment of the arbitrator. Absent exceptional circumstances, no additional fees are required. (See Rules 6.1 and 6.2)
• FORUM keeps cases moving with a standard 15-day response period. Responses, Counterclaims and Cross-Claims all have crisp, 15-day deadlines. (See Rules 2.8-2.10)
• Dispositive motions are encouraged in FORUM arbitration. Each party can file one request for a dispositive motion, such as a motion to dismiss or for summary judgment, as a matter of right. Additional motions can be filed with the arbitrator’s approval. (See Rule 2.13F) Dispositive motions can even drive cost savings when they are denied, as denial is a common trigger for settlement.
• Discovery is much more efficient in a FORUM arbitration than in court. Initial disclosures start 14 days after the Response. In many court jurisdictions, discovery is delayed until an initial conference is scheduled and held by the parties, and this hurdle can be strategically manipulated by a party seeking to delay proceedings. (See Rule 4.3A)

Time- and cost-savings in arbitration is also driven by a more general factor, and that is the amount of attention even a busy arbitrator can pay to the case over time. In court, judges can have overwhelming case dockets that often prevent judges from pro-actively managing the progress of any single case.

In contrast, arbitrators don’t suffer under oppressive caseloads and are available as necessary to keep cases moving along. This can take the form of a scheduling hearing set early in the process to structure deadlines that ensure efficient dispute resolution.

This also means that arbitrators are available to make timely rulings on discovery and other motions that can bog cases down in state and federal court where judges often take months to issue important procedural orders.

Finally, arbitrators understand that one of the most important reasons that the parties selected arbitration instead of court is to achieve an efficient resolution of their dispute. This results in a shared, even a cultural, expectation that arbitrators will act as necessary to keep cases moving along.

Later in Advice to a Young Tradesman, Franklin restates his principle as “Waste neither Time nor Money, but make the best Use of both.” Arbitration saves time and money by eliminating the time that can be wasted in the court litigation system and making the best use of parties’ time to focus on productive and efficient dispute resolution procedures.