Conducted for the U.S. Chamber Institute for Legal Reform • April 2005

Arbitration: Simpler, Cheaper, and Faster Than LitigationA Harris Interactive Survey
Arbitration: Arbitration: 

Simpler, Cheaper, and Faster Than Litigat

Simpler, Cheaper, and Faster Than Litiga

Conducted for: Conducted for:

U.S. Chamber Institute for Legal Reform U.S. Chamber Institute for Legal Reform
Table of Contents Table of Contents

 Research Objectives 3 Research Methodology 4 Major Findings 5 Detailed Findings 7 Respondent Profile and Demographics 3 Detailed Methodology 3
Research Objectives Research Objectives

The primary objectives include:

Obtain information, directly from participan

regarding arbitration procedures and outco

Test participants’ assessments of arbitrati
Research Methodology Research Methodology

 The Binding Arbitration Survey was conducted online amo

adults who are 18 years of age or older who had particarbitration.

− This was a sub-sample of a national cross-section of 31,04− 2% of the population qualified.

− For qualification, these respondents had to have been a 

binding arbitration case that reached a decision. They abeen in the binding arbitration voluntarily, due to contracwith strong urging by the court, but not ordered into arbit

 Interviews averaged about 10 minutes in length and wer

between February 28 and March 14, 2005.

 The total sample was weighted to figures obtained from th

Current Population Survey (CPS) using age, sex, educatioethnicity, income and region. 

 The theoretical sampling error of the sample is +/- 4 perce

at the 95% confidence level.
Major Findings Findings

 Arbitration is widely seen as faster (74%), simpler (63%), a

cheaper (51%) than going to court.

 Two thirds (66%) of participants say they would be likely to 

arbitration again with nearly half (48%) saying they are likeextremely likely.

Even among those who lost, a third say they are at leas

somewhat likely to use arbitration again.

 Most participants are very satisfied with the arbitrators’ per

the confidentiality of the process and its length.
Major Findings Findings

 Predictably, winners found the process and outcome very 

losers found the outcome much less fair. However, 40% o

who lost were moderately to highly satisfied with the fairneprocess and 21% were moderately to highly satisfied with outcome.

 While one in five of the participants were required by contr

arbitration, the remainder were voluntary - suggested by oparties, one of the lawyers, or the court.

 Two thirds of the participants were represented by lawyers
Who Are the Parties?

48%

30%

11%11%

An individual and a business

Two individuals

Two or more businesses

Other

Q335: Who were the parties involved in the dispute?Base: All respondents (n=609 adults)
64

21%

16%

I filed a claim or complaint

The other side filed a

complain or complaint

We both filed a claim or

complaint

Distribution of Plaintiffs and Defendants

Q420: Which of the following best describes your role in the dispute that led to arbitration?Base: All respondents (n=609 adults)
35%

19%

16%

10%

6%

5%

Suggested by my lawyer

Required by a contract

Suggested by me

Suggested by party on

other side

Suggested by lawyer on

other side

Suggested by the court

How Did They Get to Arbitration?

Q415: Which of the following best describes why you were in this arbitration?Base: All respondents (n=609 adults)*NOTE: Those with less than 5% of mentions are excluded
Neither ordere

nor urged, 45%

Strongly urged, 

55%

More than half say they were strongly urged intarbitration by a court. 

Q320: Were you ordered or strongly urged into this binding arbitration by a court?Base: All respondents (n=609 adults)
No, 37%

Yes, 63%

How often were parties represented by a 

Q425: Were you represented by a lawyer in the arbitration?Q430: Was the other side represented by a lawyer in the arbitration?Base: All respondents (n=609 adults)

Yes, 70%

Were you Represented By A Lawyer?

Other Side Represented By 
34%

27%

4%4%

3%3%

25%

Contract dispute

Personal injury

Divorce issues

Unpaid bills/loans

Custody issues

Auto accident/damage

Other

What types of disputes were arbitrated?

Q330: Thinking about the case that went into arbitration, what type of dispute was this?Base: All respondents (n=609 adults)*NOTE: Those with less than 3% of mentions are excluded

Other includes s

disputes as land

lemon law, estate 

unpaid bills, ban
35%

21%

8%

5%

3%

1%

26%

Appointed by a neutral

agency

Jointly selected from a list

Chosen by one side

Court appointed

Named in contract

Other

Not sure

How were arbitrators selected?

Q435: How was the arbitrator selected?Base: All respondents (n=609 adults)
30%

22%

15%

12%

21%

Each paid part

Other party paid

A third party paid

I paid

Not sure

Who paid the fees?

Q440: Which of the following applies to the fees for the arbitration?Base: All respondents (n=609 adults)
60%

20%

13%

7%

Given rules in

advance & rules

were largely

followed

I was not given

rules in advance

Given rules in

advance, but

actual process

differed

Not sure

Rules

Q450: Which of the following best describes the process you experienced?Base: All respondents (n=609 adults)
48%

17%

16%

14%

5%

Ruled in my favor

Ruled in favor of other side

Ruled partly in my favor, but

gave significantly less than I

sought

Evenly split decision

Ruled partly in other side's

favor but gave other side

significantly less

Outcomes (all participants)

Q465: Which of the following best describes the outcome of the arbitration?Base: All respondents (n=609 adults)
Outcomes: Award Given? (all participants)

Q470: If the claim resulted in awarding money, how much was awarded?Base: All respondents (n=609 adults)

33%

13%

14%

8%

18%

15%

No money was awarded

Under $1,000

$1,000-$4,999$5,000-$9,999

$10,000-$49,999

$50,000 or more
Ruled for the 

other side, 30%

Ruled in my 

favor, 29%

Evenly split, 

13%

Ruled in my 

favor but 

significantly 

less, 26%

Ruled for 

side b

significa

less, 3

Outcomes(Individuals in Arbitration Through Prior Contrac

Q465: Which of the following best describes the outcome of the arbitration?Base: Individuals in arbitration through a prior contract (n=78 adults)
Perceptions: Faster, Simpler, Cheaper

Q460: Do you think arbitration was faster or slower than going to court?Base: All respondents (n=609 adults)

Faster, 74%

About th

same, 12

Not sure, 8% Slower, 6%
Perceptions: Faster, Simpler, Cheaper

Q455: Do you think the arbitration was simpler than going to court or was it more complicated?Base: All respondents (n=609 adults)

Not sure, 12%

M

comp

8

About the 

same, 17

Simpler, 63%
About the 

same, 11%

More 

expensive, 8%

Not sure, 30%

Cheaper, 51%

Perceptions: Faster, Simpler, Cheaper

Q445: Thinking about the total costs (including filing fees and lawyers’ fees), do you think arbitration was cheaper or more ex

going to court?Base: All respondents (n=609 adults)
Moderately 

satisfied 

(3-5 rating) , 30%

Not suNot sa

(1-2 rat

Very satisfied 

(6-7 rating), 35%

Most participants fairly satisfied with the for choosing the arbitrator.

Q475: How would you rate the following...The process for choosing the arbitrator?Base: All respondents (n=609 adults)
Most participants in an arbitration are qusatisfied with the arbitrators’ performanc

Q475: How would you rate the following...The attentiveness of the arbitrator, The impartiality of the arbitrator, The compete

arbitrator?

Base: All respondents (n=609 adults)

54%

52%

51%

27%

23%

27%

1

1

Attentiveness of

arbitrator

Impartiality of

arbitrator

Competence of

arbitrator

Very satisfied (6-7 rating) Moderately satisfied (3-5 rating) Not satisfi
Most participants in an arbitration are sathe fairness of the process and outcome

Q475: How would you rate the following...The fairness of the process, The fairness of the outcome?Base: All respondents (n=609 adults)

48%48%

27%

24%

2

2

Fairness of the

process

Fairness of the

outcome

Very satisfied (6-7 rating) Moderately satisfied (3-5 rating) Not satisfi
Most of those who won are very satisfied the fairness of the process and outcome

Q475: How would you rate the following...The fairness of the process, The fairness of the outcome?Base: All participants who won (n=290 adults)

72%

19%

5%

15%

2%

80%

Very satisfied (6-7

rating)

Moderately satisfied (3-

5 rating)

Not satisfied (1-2

rating)

Process Outc
Even among losers significant percentages are with the fairness of the process and outcome.

Q475: How would you rate the following...The fairness of the process, The fairness of the outcome?Base: All participants who lost (n= 100 adults)

14%

26%

57%

17%

78%

4%

Very satisfied (6-7

rating)

Moderately satisfied (3-

5 rating)

Not satisfied (1-2

rating)

Process Outcome

40% rate fairness 

moderate to high

fairness of the o

moderate to 
Most participants in an arbitration are satisfied wconfidentiality of the process.

Q475: How would you rate the following...The confidentiality of the process?Base: All respondents (n=609 adults)

54%

25%

9%

Very satisfied (6-7

rating)

Moderately

satisfied (3-5

rating)

Not satisfied (1-2

rating)
Most participants in an arbitration are satisfied wlength of the process.

Q475: How would you rate the following...The length of the process?Base: All respondents (n=609 adults)

51%

33%

11%

Very satisfied (6-7

rating)

Moderately

satisfied (3-5

rating)

Not satisfied (1-2

rating)
Most of those without lawyers found arbitration very “user friendly.”

Q475: How would you rate the following...The extent to which the process was “user friendly?”**NOTE: Only asked of those who were not represented by a lawyer (n=227)

41%

35%

17%

Very satisfied (6-7

rating)

Moderately satisfied (3-

5 rating)

Not satisfied (1-2

rating)
Extremely/Very 

likely, 31%

Likely/Somewhat 

likely, 35%

Not Su

Not Likely A

19%

Two thirds are at least somewhat likely tarbitration again.

Q480: In a future dispute, how likely are you to use arbitration instead of going to court?Base: All respondents (n=609 adults)
43%

41%

6%

10%

6%

27%

46%

22%

Extremely/Very likely

Likely/Somewhat likely

Not Likely At All

Not Sure

Won Lost

Winning and losing shapes the likelihood of usiarbitration again, but a third of losers would use 

Q480: In a future dispute, how likely are you to use arbitration instead of going to court?Base: All respondents (n=609 adults)

A third of 

lost say 

least some

use arbitr
Employee, 

17%

Individual, 83%

Most were in arbitration as individuals

Q400: Were you in this arbitration as an individual or as an employee or representative of a business or organization?Base: All respondents (n=609 adults)Q405: What was the size of your business at the time of the arbitrationBase: Employees/Representatives of Business (n=103)

1-19

Employees

20-99

Employees

100-499

Employees

500 or more

Employees
16%

15%

9%

8%8%

6%

5%5%

Prof. services

Construction

Insurance

Finance

Trans./Comm./Gas/San. services

Manufacturing

Bus. services

Public admin.

What Industries Were Involved?

Q1000: What is your company’s primary industry?Q1005: What was the other company’s primary industry?Base: Employee/Representative of a Business (n=103)Base: Individual/Two or more businesses and Employee/Representative of a Business (n=90)*NOTE: Those with less than 5% of mentions are excluded

1

9%

7%7%7%

6%

5%

Real estate

Manufacturing

Construction

Prof. services

Retail trade

Bus. Services

Public admin.

Finance

Your Business? Other Business?
Demographics

Gender

Total

%

Male 62Female 38

Gender

Total

%

Male 62Female 38

Age

Tot

%

Less than 35 years old 1535-44 1845-54 2555-64 2065 or older 21

Age

Tota

%

Less than 35 years old 1535-44 1845-54 2555-64 2065 or older 21

Education

Total

%

Less than high school 1Some high school 3High school graduate or equivalent (e.g., GED) 27Attended college 22College graduate (e.g., BA, AB, BS) 27Postgraduate study without degree 6Graduate Degree 13

Education

Total

%

Less than high school 1Some high school 3High school graduate or equivalent (e.g., GED) 27Attended college 22College graduate (e.g., BA, AB, BS) 27Postgraduate study without degree 6Graduate Degree 13

Annual Income

Less than $25,000 $25,000 to $49,999 $50,000 to $99,999 $100,000 to $149,999 $150,000 or more Decline to answer 

Annual Income

Less than $25,000 $25,000 to $49,999 $50,000 to $99,999 $100,000 to $149,999 $150,000 or more Decline to answer 
Detailed Methodology

A study of Binding Arbitration participants was conducted by Harris Interactive on behalf o

Legal Reform (ILR). Interviewing was conducted between February 28 and March 14, 2005 amhad been a participant in a binding arbitration case that was not settled and they were not ordeby the court The length of the questionnaire was slightly over 10 minutes in length.

SAMPLE SELECTIONHarris Interactive maintains the Harris Poll database (HPOL) comprised of several million resp

agreed to participate in survey research. The HPOL database was used as the sample source 

Email addresses for respondents in the database have been obtained from over 100 sources, registration site, Yahoo!, HPOL banner advertisements, and MSN/Hotmail.Qualified respondents for this study were U.S adults aged 18+ who identified themselves as hathe binding arbitration process and not having their cases settled. These individuals also indicnot been ordered into arbitration by a court order.ONLINE INTERVIEWING PROCEDURESInterviews were conducted using a self-administered, online questionnaire, via proprietary, webinterviewing software. The HPOL interviewing system permitted online data entry of interviews respondents. Questionnaires were programmed into the system with the following checks:1. Question and response series2. Skip pattern3. Question rotation4. Range checks5. Mathematical checks6. Consistency checks7. Special edit procedures
Detailed Methodology (cont’d)

ONLINE INTERVIEWING PROCEDURES (cont’d)To maintain the reliability and integrity in the sample, each invitation contained a password that is unithat e-mail address. A respondent was required to enter the password at the beginning of the surveinto the survey. Password protection ensured that a respondent completed the survey only one time. 

To increase the number of respondents in the survey and to improve overall response rates, up 

reminder invitations are typically mailed at 2-4 day intervals to those respondents who have not yet psurvey. For this study, one reminder was sent to potential respondents.To increase the number of respondents in the survey and to improve overall response rates, rprovided with a summary of some of the survey responses. This too was done via the Internet. Rsent an email that provided them access to a web site that contained the survey findings. As with the 

was a password protected site that was accessible for a limited period (1-2 weeks). All data were then tabulated, checked for internal consistency and processed by computer. A segenerated tables were produced for each of the key sample groups that showed the results of each both by the total number of respondents and by the key subgroups.
Detailed Methodology (cont’d)

WEIGHTINGCompleted interviews were weighted to figures obtained from the Current Population Survey (CP

several demographic variables (e.g., sex, age, education, race and ethnicity and income) to g

results to the population at large.In addition, Harris Interactive applied a proprietary technique to the data called "propensity essentially balanced all the characteristics (e.g., demographic, attitudinal, and behavioral) of online is no surprise that certain kinds of people have a greater or lesser likelihood to be online and the

our surveys. To account for this, Harris gave each individual a “propensity weight” which correlikelihood to be online. This ensured that the sample represented the general population of thosthrough binding arbitration at large and was not skewed toward more active online users or suaddition, people who had a lesser likelihood to be online acted as a proxy for those who are 

Typical propensity weights that were used included measures of activity (our online respondents knowledge (our online samples are better informed), and attitudes (our online samples are mcynical).
Detailed Methodology (cont’d)

WEIGHTING (CONT’D)It is also worth mentioning that Harris conducts parallel telephone and online research on a regulThe Harris Poll, our monthly omnibus survey. By conducting this research, Harris is able to track 

comparisons between data collected online and by phone, closely examine the biases and m

develop strategies for correcting these biases. In fact, Harris has an internal department that is enconducting this “research on research.”EDITING AND CLEANING THE DATAThe data-processing staff performed machine edits and additional cleaning for the entire data programs acted as a verification of the skip instructions and other data checks that were writteprogram. The edit programs listed any errors by case number, question number and type. Tresolved by senior personnel, who inspected the original file and made appropriate corrections. Cwere kept of all such procedures.
For further information about this study, please contact

David Krane, Senior Vice President

Public Affairs and Government Research

212-539-9668

dkrane@harrisinteractive.com

© Harris Interactive Inc.
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