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S-28 ¦ FEBRUARY 24, 2020 ALTERNATIVE DISPUTE RESOLUTION

Have Lawyers Ruined Arbitration?

By Raychel Lean

It’s meant to be a quicker, cheaper
option, but commercial litigator
Ugo Colella of Culhane Meadows
in Washington, D.C., says alternative
dispute resolution is his last resort.
Colella’s biggest gripe is with ar-
bitration—where one client on the
losing end had to fork out $1.5 mil-
lion in attorney fees for a case where
the amount in controversy was
about $2 million.
“Generally speaking, if you ar-
bitrate, you’re going to have to be
ready to cut a substantial check,”
Colella said. Is alternative dispute resolution all it’s cracked up to be?
Photo: Royalty free
Colella advises clients dealing
with contract-based claims to head to trial instead, litigator since 1991, also advises clients against ar-
where he says there are better outcomes, and where bitration.
appellate rights remain intact. “Lawyers have figured out over the years how to
Ugo Colella partner with Culhane Meadows mess up arbitration, and make them costly and pro-
Haughian & Walsh. Courtesy photo. tracted,” Schneider said. “They drag them out, they
“I’ve seen situations where an arbitrator’s refusal file motions, they try and get discovery, they do vari-
to apply the plain terms of a contract and decision ous things in arbitration now that didn’t exist 10 or
to proceed to a hearing results in settlement because 20 years ago.”
nobody wants to pay the cost of a full-blown hear- Schneider once took part in an arbitration that
ing,” Colella said. “You sort of have to go through ended up lasting 75 trial days, after years of discovery.
a song and dance, and discovery and other things “This was almost the poster child for what not to
before you ever get to the point of getting arbitrators do in an arbitration,” he said. “What we ended up
to focus on the terms of the contract.” with was a private arbitration proceeding which be-
Colella insists his stance on staying in the court- haved like it was a court proceeding.”
room is about what’s best for his clients, not his That’s because the parties agreed to use the Flori-
wallet. da Rules of Civil Procedure, Evidence Code and full
“There’s really no economic advantage from my discovery. That arbitration cost both sides millions,
perspective to promote court,” he said. “In fact, it’s according to Schneider, who said if clients are going
to my disadvantage, because if I’m correct and I’m to be spending that kind of money they should keep
telling the client, ‘I think you’ve got a clear winner their appellate rights.
here, based on the terms of the contract,’ I should be “Absent some truly extraordinary circumstances,
done fairly soon.” it is virtually impossible to judicially review the ar-
He’s not alone. bitrator’s decision,” Schneider said.
Jeffrey Schneider of Miami’s Levine Kellogg That said, Schneider is among the majority who
Lehman Schneider + Grossman, a commercial agree mediation can work wonders.

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