How Neutral Arbitrators Balance Fairness and Efficiency
Mon, Oct 20th, 2025 | by Miles Mediation and Arbitration | Article | Social Share
As alternative dispute resolution (ADR) practitioners, we are all aware of the perceived dichotomy between fairness and efficiency in dispute resolution. In the context of arbitration, this balancing act takes center stage for the arbitrator. While the appeal of a swift resolution is undeniable, particularly in today’s fast-paced commercial world, an arbitrator’s primary duty remains to ensure a fair and just outcome for all parties. This article explores how neutral arbitrators navigate this critical terrain, examining the unique considerations in both consumer and commercial arbitration.
The Arbitrator’s Mandate: A Dual Imperative
The arbitrator’s role is fundamentally one of a neutral adjudicator. This neutrality, however, carries a dual imperative: to render a decision based on evidence and applicable law, and to do so in a manner that is both timely and cost-effective. In ideal circumstances, efficiency enhances fairness by reducing the financial and emotional burden of lengthy litigation. Conversely, a procedurally fair process, while perhaps taking slightly longer, ultimately leads to a more robust and well-reasoned decision, thereby enhancing the perceived and actual fairness of the outcome.
Navigating the Tightrope: Strategies for Balancing
Arbitrators employ a range of strategies to achieve this delicate balance. These are not rigid methods, but rather adaptive approaches tailored to the specific case, the parties’ expectations, and the governing arbitration rules.
Case management orders (CMOs): Proactive case management is paramount. Arbitrators often issue detailed CMOs early in the proceedings, establishing clear timelines for pleadings, discovery, pre-hearing briefs, and the hearing itself. These orders are not merely suggestions; they are binding directives designed to keep the process on track. A well-crafted CMO anticipates potential roadblocks that slow down or drags out the arbitration, and provides mechanisms for addressing them, such as strict page limits for submissions or limitations on discovery scope.
Phased arbitration: For complex cases, a phased approach can be an effective tool. Issues of liability can be addressed before delving into damages, or specific discrete issues can be bifurcated. This allows for earlier resolution of certain aspects of the dispute, potentially leading to settlement or simplifying the remaining proceedings.
Discovery management: Discovery is often a major driver of both cost and delay. Arbitrators must exercise their authority to ensure discovery is proportionate to the claims and defenses. This may involve limiting the number of depositions, restricting the scope of document requests, or overseeing e-discovery processes efficiently. The arbitrator’s role is to prevent discovery from becoming unduly burdensome rather than a tool for uncovering relevant facts.
The hearing itself: The hearing is where the rubber meets the road. Arbitrators can promote efficiency by:
Pre-hearing submissions: Requiring detailed pre-hearing briefs that clearly articulate the parties’ arguments and identify the key evidence.
Witness preparation: Encouraging parties to prepare witnesses thoroughly to ensure direct and cross-examination are focused and concise.
Documentary evidence: Emphasizing the use of agreed-upon exhibit lists and ensuring documents are clearly organized and readily accessible.
Technology utilization: Leveraging technology for virtual hearings, electronic exhibit presentation, and real-time transcription can significantly reduce logistical hurdles and costs.
Consumer Arbitration: The Unique Challenges
Consumer arbitration presents a distinct set of challenges when balancing fairness and efficiency. The inherent power imbalance between a large corporation and an individual consumer necessitates a heightened awareness of fairness.
Accessibility: Arbitrators must ensure the process is accessible to consumers. This includes considering the location of the hearing, and the consumer’s ability to navigate complex legal procedures. While efficiency is desirable, it should not come at the expense of a consumer’s ability to present their case effectively.
Information asymmetry: Consumers often lack the sophisticated legal teams and resources of their corporate counterparts. Arbitrators should be mindful of this information asymmetry and ensure that procedures do not unduly disadvantage the consumer. This might involve carefully scrutinizing requests for extensive discovery from the consumer or ensuring that the corporate party provides necessary information in a digestible format.
Cost: The cost of arbitration can be a significant barrier for consumers. Arbitrators may need to consider fee-splitting arrangements as mandated by rules or statutory requirements and ensure that discovery and hearing processes are not excessively expensive. The efficiency gained from a streamlined process can be crucial in making arbitration a viable option for consumers.
Unconscionability: Arbitrators are tasked with reviewing arbitration clauses for unconscionability. This often involves careful examination of the clause’s terms and the circumstances under which it was agreed to, ensuring that the process itself is not fundamentally unfair, even if it is efficient.
Commercial Arbitration: The Emphasis on Predictability and Finality
In commercial arbitration, the pendulum often swings further towards efficiency, driven by the parties’ sophisticated understanding of the process and their emphasis on predictability and finality.
Commercial expectations: Commercial parties typically enter into arbitration agreements with a clear understanding of the benefits: a potentially faster, more private, and expert-driven resolution than traditional court litigation. Arbitrators must respect these expectations.
Expertise: Commercial arbitration often involves disputes requiring specialized industry knowledge. Arbitrators with relevant expertise can expedite understanding of complex issues, leading to more efficient and informed decision-making.
Streamlined procedures: Commercial arbitration often benefits from more streamlined procedures. Parties and arbitrators may agree to forgo certain procedural steps common in litigation, such as extensive discovery or formal pleadings, in favor of a more direct approach.
Finality: The finality of commercial arbitration awards is a key draw. Efficient processes contribute to this, as protracted proceedings can erode the perceived value of arbitration. Arbitrators must ensure their decisions are well-reasoned and based on a thorough understanding of the evidence and law to uphold this finality.
The Role of Arbitration Rules and Agreements
Crucially, the arbitrator’s ability to balance fairness and efficiency is often shaped by the governing arbitration rules (e.g., AAA, ICC, JAMS) and the specific arbitration agreement between the parties. These frameworks provide the procedural tools and constraints within which the arbitrator operates. Arbitrators must be intimately familiar with these rules and interpret the arbitration agreement diligently to ensure their management of the process aligns with the parties’ intentions.
Conclusion: A Continuous Endeavor
The task of balancing fairness and efficiency in arbitration is not a static one. It requires constant vigilance, adaptability, and a deep commitment to the arbitrator’s neutral role. By employing proactive case management, judicious use of procedural tools, and a keen understanding of the unique dynamics of consumer and commercial disputes, neutral arbitrators can indeed achieve resolutions that are both just and timely. The pursuit of this balance is not merely a procedural nicety; it is the very essence of effective and respected arbitration.
*Originally published in the Daily Business Review and reprinted with permission.
About Paul Burkhart
Now a full-time arbitrator and mediator, Paul J. Burkhart established The Law Offices of Paul J. Burkhart, PL, after graduating from the University of Baltimore School of Law in his hometown of Baltimore, Maryland, and moving to Palm Beach Gardens, Florida, in 2004. He was admitted to practice law in Florida on January 24, 2005. As the principal of his firm, he has accumulated over 16 years of business experience, benefiting more than 2,500 entrepreneurs since opening his law practice. He is a member of the American Bar Association, the ABA Section of Dispute Resolution, and the Florida Bar’s Alternative Dispute Resolution Section. Throughout his career of arbitrating more than 200 cases, Burkhart’s main goal is to preside over arbitrations fairly and swiftly, ensuring the parties are heard and avoiding costly litigation while reaching an impartial resolution.