Show ai arbitration titration bit ration association settles disputes out of court to save time and money by WARREN FARNHAM released by western newspaper NEW YORK working quietly and without profit a group of men little known to the average citizen is enabling the nations business to avoid a serious bottleneck in the national defense program 0 that of commercial disputes which bog down industry and tie up the low flow of capital if allowed to pursue their normal course through the courts these disputes might seriously slow the march of americas rearmament program by a stifling mass of legal red tape disheartening expense and growing ill will the men are members of the national panel of arbitrators of the american arbitration association for 14 years their network of tribunals throughout the united states has been helping business men settle their grievances out of court now launching a major expansion of their efforts in the light of the defense emergency they have behind them a record of satisfactory settlements which might be viewed with envy by any system of courts in the world yet their methods are so simple as to seem too easy to be true in a time when business has ha been finding its life more complicated than ever before idea in operation one can see how the arbitration idea operates fundamentally by taking some such hypothetical situation as this one that might arise in your own home town almost any day let us say otto schultz Schult 2 your neighborhood butcher orders a consignment sign ment of homemade sausages from fred perkins a farmer on the edge of town otto keeps the sausages in his icebox for a few days holding them for a big saturday sale when he opens them he finds they are spoiled he claims that they must have been delivered in that condition and refuses to pay his bill of some twenty odd dollars farmer perkins insists that the goods were delivered in perfect condition and wants to collect his bill there are a lot of harsh words but both men W would like to iron out the difficulty in a hurry burry because they know th eyll probably have to get along with each other for years to come they decide to arbitrate otto and F farmer armer perkins sign an agreement to put their case up to the association and to abide by its decision within 10 days three men are selected as arbitrators from the immediate vicinity of the town bill jones cashier of the farmers and merchants bank george smith the hardware store owner and mark daniels milk and eggs dealer meeting fleeting Is held the five men meet in bill jones office since the cashier is the most active designated arbitrator for that area and knows the procedure in less than three hours the three arbitrators have settled the case cas e at a cost of a few dollars it is brought out in the course of the hearing that farmer perkins sold several other batches of sausages to customers during the 48 hours preceding his sale to otto an and d that these people had no complaint the hardware store man remembers that otto has had some trouble rouble t with his refrigerator in the past year only one hour uni required b by this au new lork arbitrator seated in tin the center above to settle a caie ne involving rn claims for or prop erty arty th taimage image causes of 0 the accident were biere disused diw used informally fry by the li uit illnesses nesses seated about him the arbitrator irbit is a member of the amer ican can arbitration association which maintains nationwide nation wide facilities joy for se liling disputes out of court and the bank cashier points out that the butcher already has ordered a new motor for the machine farmer perkins is paid in full for his sausages and the case is ended quickly except that otto and his wife are invited to a special sausage dinner at the perkins home on the following evening in just as simple a manner as that the association a private nonprofit organization has handled cases involving sums ranging from 5 to some disputes have been submitted for arbitration in the tribunals of the association since 1926 about of these were settled aled before reaching the hearing stage this indicates according to the association that the mere willingness in griess to arbitrate is a long step toward forgiving and forgetting of the 12 awards made 6 per cent have been cen appealed to the courts and not more than halt half a dozen have leen been sent back by the judges tor for rehearing other larger cases the case of butcher otto and farmer perkins of course does not affect the national defense program except that enmity is stopped at its source but it is a simple illustration of how the bigger cases are being settled without fanfare or embarrassing barr assing publicity and at an average c ost cost of only 1 per cent of the amount involved behind the associations plan for encouraging business to avoid the delays of litigation is cornelius V whitney newly elected president of the organization and former chief of the board of liaison officers whitney who is also board chairman of the pan american airways worked out the program 1 in n cooperation with such prominent business figures as P M haight secretary treasurer 4 r of the international general electric company james F hughes former U C V whitney president of the american society of certified public accountants and evan E young vice president of pan american airways seven thousand business and professional fess ional leaders in 1700 cities and towns are being enlisted as industrial minute men in the groups nationwide nation wide program for keeping peace in business and commerce according to whitney the members of the local tribunals because of their background prestige and experience peri ence will form the backbone in this plan to smooth the flow of trade through the increased use of arbitration with the aim of eliminating long court delays and costly fees that bog down industry local functions primary functions of their efforts locally will be to survey the vital industries of their areas and urge business men to join the other trade groups using the arbitration method as a standard means for s settling ettling business disputes how important the government regards the need for a swift and effective alternative to court action in times of emergency can be gauged from the tact fact that army contracts of or less now contain provisions for three man arbitration boards to decide questions of material whenever a disagreement arises between a business firm and military purchasing agencies the british purchasing commission which spent more than for aeronautical products alone in this country during 1940 has been using a similar arbitration clause in its contracts with many american firms commenting on these measures whitney said such forethought on the part par t of a f both government and private industry is symbolic of a desire to avoid any of the situations of the world war when millions of dollars worth of vital contracts became tied up in lengthy court suits in the field of commercial peace the association this year has come upon even greener pastures it has been named as administrator of all disputes in the motion picture industry by the federal government and the department of justice this is the first time that an independent agency has ever been selected by the government to settle disagreements in a large industry 31 special tribunals As a result of this arrangement the association is establishing 31 special tribunals in major cities where motion picture producers and distributors will have their trade disputes settled by lay arbitrators the committee and the associations six year old inter american commercial arbitration commission led by thomas J watson international ter business machines president have reported virtual perfection of a method to settle commercial disputes anywhere in the western hemisphere and portions of the far east entirely by mail through this arbitration mach machinery in the disputants receive the services of topflight top flight authorities on their problem without ever seeing one another with the cementing of inter american relations as its primary aim the association has launched this mail arbitration campaign to help avoid costly delays in handling of merchandise or in the release of funds involved in trade the smallest claim adjudicated by the association was for 5 for a spot a cleaning concern left on a parlor rug the arbitrator and all concerned visited the rug owners home held the hearing on the spot and agreed on as damages the largest amount involved was sought by an agent as commission on a fur contract the case had been tried in a state court and the jury after I 1 listening and pondering for six weeks had disagreed having spent a little over in litigation without getting anywhere the principals tried arbitration tra tion this time before three arbitrators the case was settled in nine days at a cost of not counting stenographic charges oddest bisp dispute ute what is perhaps the oddest dispute and the swiftest settlement in recent records is told in the story of a controversy t tro versy which arose concerning a broadway theater hit on the afternoon noca of the opening the leadin leading 9 m mart according to the case report found that his name was not in lights on the theater marquee ile he threatened a walkout the producers gave way but almost al most immediately the leading lady threatened a walkout of her own under their actors equity contracts both stars were bound to arbitrate it was nearly 5 p m when the association was called an hour and a hall half later three arbitrators appeared and by 8 p m the leading mans man s name went up in ligh lights t s the curtain rose on time tim the A A A is supported ted by membership b fees and small contributions graduated u P to paid in by odd corporations organizations and individuals new york started it congress and many state legislatures 1 have followed the lead of new york which 20 years yea rs ago granted legal standing to private vate arbitration courts and bar ba r associations have voiced approval of it for it helps keep clogged calendars clear the new york law was the first of its kind in america in recent years the arbitration network branching out of the organizations main offices in new york city has spread over all the americas from canada to argentina following trade routes |