In Quest of the Arbitration Trifecta, or Closed Door Litigation?

Pepperdine University School of Law Professor Thomas J. Stipanowich has published In Quest of the Arbitration Trifecta, or Closed Door Litigation?: The Delaware Arbitration Program, Journal of Business, Entrepreneurship and the Law, Forthcoming; Pepperdine University Legal Studies Research Paper No. 2013/10. In his article, Professor Stipanowich examines the Delaware Arbitration Program. The unique and voluntary program was established and implemented in 2009 in order to settle disputes between businesses operating in the state.

Here is the abstract:

The Delaware Arbitration Program established a procedure by which businesses can agree to have their disputes heard in an arbitration proceeding before a sitting judge of the state’s highly regarded Chancery Court. The Program arguably offers a veritable trifecta of procedural advantages for commercial parties, including expert adjudication, efficient case management and short cycle time and, above all, a proceeding cloaked in secrecy. It also may enhance the reputation of Delaware as the forum of choice for businesses. But the Program’s ambitious intermingling of public and private forums brings into play the longstanding tug-of-war between the traditional view of court litigation as a public venue for private dispute resolution and the and perception of courts as institutions that represent and are accountable to the public. A constitutional challenge based on third parties’ right of access to court proceedings resulted in a district court ruling that arbitration proceedings heard before sitting judges of the Delaware Chancery Court were “essentially” non-jury civil trials and thus were subject to public access. The case raises legitimate questions about the appropriateness of structuring a program in which sitting judges serve as arbitrators and preside over a procedure that is effectively shielded from public view. It also implicates issues regarding the use of public resources in ostensibly private disputes, and even the way our justice system is funded. This article explores the factors that provided the impetus for the Delaware Arbitration Program and analyzes the arguments and policy considerations for and against the district court’s decision.

This and other scholarly articles authored by Professor Stipanowich may be downloaded from the Social Science Research Network.