Deliberate opaqueness in dispute resolution discourages parties from litigating to judgment.

Evidence

In complex cases that are neither explicitly covered by the trade rules nor dealt with according to established custom, it is difficult to determine what substantive rules of decision are applied. Arbitrators explain that they decide complex cases on the basis of trade custom and usage, a little common sense, some Jewish law, and, last, common-law legal principles. There are no general rules of damages. When calculating damages, the arbitrators look at the stone, consider the circumstances, and apply their business experience. Many dealers feel that the arbitrators have redistributive instincts; they cite the unpredictability of the decisions as well as the arbitrators’ tendency to “split the difference” as an important motivation to settle their disputes on their own. This may be a reason why, while 150 arbitration complaints are filed each year, only thirty to forty go to judgment. The arbitrators announce their judgment, but they neither make findings of fact nor explain their reasoning. The absence of explicit findings of fact and written opinions is a precaution to prevent people from complaining, rightly or wrongly, that the arbitrators were biased, unfair, or relied on evidence that lacked probative value. — Lisa Bernestein, Opting out of the Legal System, 88

Categorization

• XREF: The ‘jury black box’ parallels how the arbitrators’ unspoken reasoning, like a jury’s, generates uncertainty that pushes parties to settle — connects to the reader’s interest in how non-cooperation is enforced through predictable-but-opaque third-party mechanisms. — connects to: Concealed deliberation can produce better judgments than open debate; Unwritten arbitration decisions make outcomes unpredictable in novel cases. — Lisa Bernestein, Opting out of the Legal System, 263; Secrecy norms make an industry prefer extralegal agreements over courts — Lisa Bernestein, Opting out of the Legal System, 144 (+5 more)
• QUESTION: Does the deliberate lack of written opinions serve as a network-closure mechanism — protecting the arbitrators’ authority from challenge while keeping disputes bottled within the community? Worth chasing whether opaqueness here is protective or coercive.

Related

• Unwritten arbitration decisions make outcomes unpredictable in novel cases. (similarity 0.83)
• Arbitration secrecy hides disputes from public view once judgments are paid (similarity 0.79)

Broader Connections

• Unwritten arbitration decisions make outcomes unpredictable in novel cases. #expands (0.85) — Lisa Bernestein, Opting out of the Legal System, 263
• Concealed deliberation can produce better judgments than open debate #qualifies (0.75)