Arbitration panels deliberately over-compensate and decide quickly because accurate damage valuation is impractical.
Evidence
Even the expert diamantaires who sit on the DDC’s arbitration panel have difficulty accurately valuing lost profit and business opportunities forgone. They are allowed to award punitive damages, however, and usually err on the side of generously compensating the promisee for alleged lost profit. They render their decisions quickly so as to minimize the number of business opportunities the promisee will have to forgo when he is not paid. — Lisa Bernestein, Opting out of the Legal System, 154
Categorization
- XREF: connects to: Private arbitration can impose punitive damages to deter breach where courts cannot.
Related
- Arbitral panels can exceed court damage limits through punitive damages and fines. (similarity 0.84)
- Arbitration’s speed offsets its limited advantage in valuing lost profits. (similarity 0.82)