Arbitration is Faster to Resolution than Court—and the Difference can be Assessed Monetarily
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A groundbreaking study by the economic research firm Micronomics quantifies the significant time differences between litigation and AAA arbitration from initiation of a case to the final determination—and concludes that arbitration accelerates the pace of dispute resolution.
Trial Time vs. Arbitration Time
Federal courts take much longer to resolve cases by trial and appeal than arbitration by the AAA. These differences are systematic across almost all states and sections of the country and are especially significant in the states with the highest arbitration and federal court caseloads. As budget cuts close courtrooms and reduce judicial and court staff, delays will only increase.
- On average, U.S. district court cases took more than 12 months longer to get to trial than cases adjudicated by arbitration (24.2 months vs 11.6 months).
- U.S. district and circuit court cases required at least 21 months longer than arbitration to resolve when the case went through appeal (33.6 months vs 11.6 months).
Cost to Business with a Delay in Resolution
Parties to a case are constrained from using the funds at issue; therefore, the greater the amount at issue, the greater the loss associated with delay.
- Direct losses associated with additional time to trial required for district court cases as compared with AAA arbitration were approximately $10.9-$13.6 billion between 2011 and 2015, or more than $180 million per month.
- Direct minimum losses associated with additional time through appeal required for district and circuit court cases as compared with AAA arbitration were approximately $20.0-$22.9 billion over the same period, or more than $330 million per month.
Direct Economic Opportunity Cost (Lost Resources) Associated with Delay to Trial and Delay through Appeal, 2011-2015
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