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🪵 The Threshold

Arbitrators familiar with industry custom resolve disputes more predictably than judges

Properties2
tagsja-picks, xref, causal_relationships, primary_study, singleton, category/causal-relationships
aliases@bernstein_opting_1992, loc. 236

2 min read

Arbitrators familiar with industry custom resolve disputes more predictably than judges

Evidence

In disputes other than breach of a promise to pay money or deliver a stone, which are dealt with in the bylaws or according to well-established custom, arbitrators’ verdicts may be more accurate and predictable than those of a court since arbitrators possess industry expertise and are permitted to consider information that would be excluded in court under the rules of evidence. If a diamond dispute were decided by a court, the application of industry custom would be highly unpredictable: unlike a DDC arbitrator, who can apply his own knowledge of industry custom, a judge would have to determine the content of customary norms from the conflicting testimony of expert witnesses. The uncertainty introduced by a judge’s need to resolve conflicting testimony would greatly reduce the expected benefit to the promisee of having a legally enforceable contract. — Lisa Bernestein, Opting out of the Legal System, 236

Categorization

  • XREF: Connects to Ellickson’s work on how informal community norms and third-party enforcers can outperform formal legal institutions in tight-knit groups. — connects to: Private arbitration can effectively substitute for courts — Lisa Bernestein, Opting out of the Legal System, 40; Jewish law mirrors merchant-arbitration customs that modern diamond arbitrators use — Lisa Bernestein, Opting out of the Legal System, 187; Absent written opinions, arbitration outcomes remain unpredictable in novel cases. — Lisa Bernestein, Opting out of the Legal System, 263 (+2 more)

Broader Connections

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