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ADR Arbitration Challenged in Delaware

Friday, October, 28, 2011

ADR arbitration has become a contentious point in the state of Delaware, where residents in favor of open government have challenged a state law that permits Court of Chancery members to participate in secret arbitration proceedings designed to help settle disputes involving private enterprise.  The law, first passed in 2009, alleges that the state act is in conflict with the constitutional rights of citizens to be present during court proceedings.


David Finger, the attorney who filed the complaint on behalf of a Delaware citizens' group, maintains that even though "the statute and rules call the procedure `arbitration,’ it is really litigation under another name…The parties still examine witnesses before and present evidence…The only difference is that now these procedures and rulings occur behind closed doors instead of in open court.”


ADR Arbitration Case Names Government Officials


Defendants named in the case include the state of Delaware along with state judges and the Court of Chancery in particular.  No comment was forthcoming from the office of Beau Biden, sitting Attorney General for Delaware.  However, Leo Strine Jr., who currently heads the Court of Chancery, did issue a statement in support of the need for arbitration proceedings to provide businesses with an alternative dispute resolution procedure so that not all disagreements need to go to court.


Such proceedings may center on diverse issues including the need for engineering arbitration.