Types Of Awards Issued By An Arbitrator Bare Bones Vs Reasoned

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Arbitration, as a method of alternative dispute resolution (ADR), has gained significant traction in recent years due to its efficiency, cost-effectiveness, and flexibility compared to traditional litigation. A crucial aspect of the arbitration process is the arbitrator's award, which is the final decision rendered by the arbitrator(s). Understanding the different types of awards that an arbitrator can issue is essential for parties involved in arbitration proceedings. This article delves into the two primary types of awards: Bare Bones and Reasoned awards, exploring their characteristics, advantages, and disadvantages.

Bare Bones Award

A Bare Bones award, also known as a summary award or a simple award, is the most basic type of arbitral award. As the name suggests, it is characterized by its brevity and lack of detailed explanation. In a Bare Bones award, the arbitrator simply states the outcome of the arbitration, indicating which party prevailed and the relief granted, if any. There is no discussion of the evidence presented, the legal principles applied, or the reasoning behind the decision. The award is essentially a conclusion without the supporting analysis.

Characteristics of Bare Bones Awards

  • Conciseness: Bare Bones awards are typically very short, often consisting of just a few sentences or paragraphs. The arbitrator avoids lengthy explanations or legal analysis.
  • Lack of Reasoning: The most distinguishing feature of a Bare Bones award is the absence of any reasoning or justification for the decision. The arbitrator does not explain why they reached a particular conclusion or how they applied the law to the facts.
  • Finality: Despite their brevity, Bare Bones awards are considered final and binding on the parties, just like any other type of arbitral award.
  • Enforceability: Bare Bones awards are generally enforceable in courts, as long as they meet the basic requirements of an arbitral award, such as being in writing and signed by the arbitrator(s).

Advantages of Bare Bones Awards

  • Efficiency: The primary advantage of Bare Bones awards is their efficiency. Because the arbitrator does not have to spend time writing a detailed explanation, the award can be issued more quickly, saving time and costs for the parties.
  • Cost-Effectiveness: The reduced time and effort required to prepare a Bare Bones award translate into lower costs for the arbitration process. Arbitrators often charge less for issuing Bare Bones awards compared to Reasoned awards.
  • Privacy: Some parties prefer Bare Bones awards because they keep the details of the dispute and the arbitrator's reasoning confidential. The lack of a detailed explanation means there is less information that could potentially be disclosed to the public.

Disadvantages of Bare Bones Awards

  • Lack of Transparency: The main disadvantage of Bare Bones awards is the lack of transparency. The absence of reasoning makes it difficult for the parties to understand why the arbitrator reached a particular decision. This can lead to dissatisfaction and a perception of unfairness.
  • Difficulty in Judicial Review: Bare Bones awards can be challenging to review by courts. Because there is no explanation of the arbitrator's reasoning, it is difficult for a court to determine whether the arbitrator made an error of law or fact. This can limit the scope of judicial review and make it harder to challenge the award.
  • Potential for Misinterpretation: Without a clear explanation of the reasoning, there is a risk that the parties may misinterpret the award or disagree on its meaning. This can lead to further disputes and potential litigation.

Reasoned Award

A Reasoned award, also known as a reasoned opinion or a detailed award, is a more comprehensive type of arbitral award. In a Reasoned award, the arbitrator not only states the outcome of the arbitration but also provides a detailed explanation of the reasoning behind the decision. The arbitrator discusses the evidence presented, the legal principles applied, and the rationale for the conclusions reached. Reasoned awards offer greater transparency and clarity compared to Bare Bones awards.

Characteristics of Reasoned Awards

  • Detailed Explanation: The key characteristic of a Reasoned award is the detailed explanation of the arbitrator's reasoning. The arbitrator discusses the facts of the case, the arguments of the parties, the relevant legal principles, and the reasons for the decision.
  • Legal Analysis: Reasoned awards typically include a thorough analysis of the legal issues involved in the dispute. The arbitrator cites relevant statutes, case law, and legal precedents to support the decision.
  • Transparency: Reasoned awards provide transparency by explaining the arbitrator's thought process and the basis for the decision. This allows the parties to understand why the arbitrator reached a particular conclusion.
  • Judicial Review: Reasoned awards are easier for courts to review because they provide a clear record of the arbitrator's reasoning. This makes it easier for a court to determine whether the arbitrator made an error of law or fact.

Advantages of Reasoned Awards

  • Transparency and Clarity: The primary advantage of Reasoned awards is the transparency and clarity they provide. The detailed explanation of the arbitrator's reasoning helps the parties understand the basis for the decision and reduces the potential for misinterpretation.
  • Enhanced Judicial Review: Reasoned awards facilitate judicial review because they provide a clear record of the arbitrator's reasoning. This makes it easier for a court to determine whether the arbitrator made an error of law or fact and to decide whether to uphold or set aside the award.
  • Precedential Value: Reasoned awards can have precedential value, especially in specialized areas of law. The arbitrator's analysis and reasoning may be persuasive in future cases involving similar issues.
  • Satisfaction of Parties: Parties are often more satisfied with Reasoned awards because they feel that their arguments have been heard and considered. The detailed explanation of the reasoning helps to build trust in the fairness of the arbitration process.

Disadvantages of Reasoned Awards

  • Time and Cost: Reasoned awards take more time and effort to prepare, which can increase the cost of the arbitration process. Arbitrators typically charge more for issuing Reasoned awards compared to Bare Bones awards.
  • Potential for Appeal: The detailed explanation in a Reasoned award can provide more grounds for appeal. If the arbitrator's reasoning is flawed or inconsistent, it may be easier for a party to challenge the award in court.
  • Disclosure of Confidential Information: Reasoned awards may disclose confidential information about the parties and their dispute. This can be a concern for parties who value privacy and confidentiality.

Choosing Between Bare Bones and Reasoned Awards

The decision of whether to request a Bare Bones or Reasoned award depends on the specific circumstances of the case and the preferences of the parties. Factors to consider include:

  • Complexity of the Dispute: In complex cases involving significant legal issues, a Reasoned award is often preferable. The detailed explanation of the arbitrator's reasoning can help the parties understand the decision and reduce the potential for future disputes.
  • Importance of Transparency: If transparency is a high priority, a Reasoned award is the better choice. The detailed explanation provides clarity and builds trust in the fairness of the arbitration process.
  • Cost Considerations: If cost is a major concern, a Bare Bones award may be more appropriate. The reduced time and effort required to prepare a Bare Bones award can save the parties money.
  • Potential for Judicial Review: If there is a significant risk of judicial review, a Reasoned award is advisable. The detailed explanation of the arbitrator's reasoning makes it easier for a court to review the award and determine whether it should be upheld.
  • Confidentiality Concerns: If confidentiality is a primary concern, a Bare Bones award may be preferable. The lack of a detailed explanation reduces the risk of disclosing confidential information.

Conclusion

In conclusion, both Bare Bones and Reasoned awards have their own advantages and disadvantages. The choice between the two depends on the specific needs and priorities of the parties involved in the arbitration. Bare Bones awards offer efficiency and cost-effectiveness, while Reasoned awards provide transparency and clarity. Understanding the characteristics of each type of award is crucial for making an informed decision about which one is best suited for a particular case. Ultimately, the goal is to ensure that the arbitration process is fair, efficient, and produces a resolution that is acceptable to all parties involved.