For Those Who Still Favor Arbitration Over Litigation
The procedural history recounted in a recent Wisconsin Court of Appeals decision reviewing a ruling by Waukesha County Circuit Court Judge Michael Bohren is Exhibit 1 in demonstrating that arbitrations are often as costly, if not more so, than litigation. The parties in Sewart v. Silvercryst Ltd. agreed to arbitrate their construction dispute (a leaky basement claim) in the Metropolitan Builders Association arbitration system.
Hilarious highjinks (if you’re not one of the parties) ensued, including the arbitration board’s order directing the 
contractor to fix the problem rather than pay for it, the contractor’s failure to timely remedy the problem, recurrent basement flooding, a reconsideration request by the contractor, a second written decision by the arbitration board, and eventually, resort to the courts to enforce the decision.
Regardless of the outcome, the point is that arbitration can often lead to either an exercise in Solomonic baby-splitting, or end up back in court trying to enforce an order that’s required substantial legal wrangling to obtain. Which isn’t to say that litigation’s always better — this case could potentially have had similar issues even before a court of law.
Arbitration isn’t to be avoided at all costs, and it has its place. However, such a decision should be made carefully and only after consideration of possible outcomes, both good and bad. In general, I favor litigation — it has become more streamlined as courts permit the parties to work out their disputes, often frame the issues themselves, and limit discovery as the parties see fit. There may be a particular dispute that lends itself to a more specialized decision-maker, but those instances are the exception rather than the rule.
Flooded basement photo courtesy Massachusettes Dept. of Environmental Protection photostream via this creative commons license.
