Employers and their lawyers often favor mandatory arbitration of employment claims for two reasons: It’s a cost-effective alternative to court, and it’s an insurance policy against runaway jury verdicts.
Arbitration, however, can often prove just as costly as court. More and more arbitrators are allowing plaintiffs to engage in discovery that’s nearly as expansive (and expensive) as what trial courts permit.
Additionally, employers have to add into the equation the cost to file the claim. American Arbitration Association fees can run from $950 to $65,000. Then there’s the arbitrator’s time, which often exceeds $500 per hour for prehearing conferences, discovery, motions and finally the actual hearing time and the drafting of the opinion.
Add it all up and the defense costs associated with arbitration can easily exceed defense costs in a traditional court proceeding.
Thus, while many employers continue to favor arbitration to...(register to read more)