Lost Opportunity to Use Outstanding Sitting Judges in Private Arbitration?
"Publicity is justly commended as a remedy for social and industrial diseases. Sunlight is said to be the best of disinfectants; electric light the most efficient policeman." – Louis D. Brandeis
Steven M. Davidoff reports on August 31, 2012 in the New York Times, about “The Life and Death of Delaware’s Arbitration Experiment.” Thanks to the Delaware legislature’s amendment of its laws, the Delaware Chancery Court, acknowledged by many to be an excellent forum for adjudicating corporate disputes, was empowered to engage in private arbitration.
The idea was that private companies, never eager to air their dirty linen in public, would seek out the expertise of the Chancery Court in private arbitration. Arbitrations would also generate arbitration fees ($6,000 a day) and a $12,000 filing fee. However, the secrecy of the proceedings was challenged in federal district court. As described by Mr. Davidoff, “the federal court found that the arbitration proceedings were effectively a civil trial” and thus “required to be open.”
An appeal to the Third Circuit is likely to follow.
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