INTRODUCTION. Publication of the accompanying report on Arbitration was prompted by steps taken in the current year by the Chicago Association of Credit Men to encourage commercial arbitration by establishing a permanent bureau. The author, Mr. Samuel Rosenbaum, devoted seven months in 1915 to study of the subject in London. It is believed that his report will answer all of the queries arising in the mind of an American lawyer or business man. Mr. Rosenbaum was invited to assist a special committee of the Chicago Association of Credit Men in formulating rules and his services were given for this work by the American Judicature Society. The rules are published in this bulletin as an appendix. In an address at the annual meeting of Credit Men Mr. Rosenbaum explained that the greatest drawback to the success of arbitration in England lies in the fact that the rules generally in force there contemplate decisions on points of law as well as on facts. The man qualified by business experience to act as arbitrator in disputes arising in a particular trade has no special qualification to pass upon points of law. This difficulty is met in a measure by the selection of barristers as arbitrators, and a class of lawyers specializing in such work has been called into being. Something of economy and efficiency is lost by this division of the field. It was shown that the ideal procedure would be submission of questions of fact to the trade expert as arbitrator, and submission of points of law, should there be any, to a court having judges experienced in commercial law. Thereupon Chief Justice Olson of the Municipal Court of Chicago informed the Credit Men that he would establish an Arbitration branch court and assign thereto a specially qualified judge to pass upon questions of law. The rules were framed to permit of prompt co-operation between arbitrators and the judge of the Arbitration branch court. This improvement upon English practice illustrates the opportunity now existing for getting commercial arbitration established in the United States upon a correct basis. What is most needed at this time is full information concerning the history and success of arbitration in other countries. The study of arbitration in England herewith 3 presented affords a wealth of data which needs to be digested by American business men and lawyers. The ready co-operation of courts with the trade world is to be presumed once the need is appreciated. By virtue of the powers conferred upon the administrative head of the Municipal Court of Chicago he was able to assure such co-operation forthwith. The act creating this court gives its chief justice power to establish such special branches as may be needed and to assign to them any of the thirty judges of the court. This is only another demonstration of the value of large administrative powers conferred upon a responsible judicial manager, already demonstrated by the creation of numerous other specialized courts. It is only a matter of time when there will be in every city, as there are already in several, such an organized court with a judicial manager of adequate powers. It is easy to understand the success of arbitration so far as it involves adjudication of disputed facts in commercial transactions. The procedure of the formal court with judge and jury cannot permit of successful competition in this field. 1. The jury is necessarily uninformed as to the technical questions involved, usually those of quality and condition of wares. It is hardly possible to educate a jury sufficiently in a particular cause and such education is slow and costly. 2. The common law powers of the jury, in most American states, are greatly abridged, thus limiting the opportunity for an experienced judge to overcome the inexperience of jurors. 3. We cannot get away from the jury even in commercial causes, and in the cases when no jury is demanded, the judge, however versed in commercial law, cannot be equal to the expert lay arbitrator who has spent a long career in a narrow and technical field. 4. The business of the court must be conducted in formal manner, with only limited reference to the convenience of litigants. Causes must take their turn on the calendar and even in courts which are quite abreast of their work-overlooking the fact that such courts are almost unknown in American cities-there cannot possibly be such flexibility with reference to holding of sessions as when lay arbitrators preside. The successful employment of arbitration on any considerable scale permits of the creation of temporary commercial tribunals on short notice. in scores of places, expanding or contracting in number to accord with the volume of business. Such a practice goes far to relieve the courts from work which they cannot do economically and permits them to concentrate upon classes of causes in which they are indispensable. The necessity for the organized court to conserve its energies is sufficient warrant for the expectation that such courts will welcome the introduction of commercial arbitration. One of the reasons for the slow progress made by arbitration in this country lies in the reluctance of commercial lawyers to submit points of law to lay arbitrators. It is believed therefore that the machinery now devised for having such points determined in court will meet this objection and afford eventually a better method of arbitration than that employed abroad. The plan combines the ideal method for determining questions of fact with a standard procedure for deciding points of law. The worth of commercial arbitration is not to be questioned in view of its remarkable growth in England, a growth made in the face of prejudice on the part of many judges and lawyers. For a long time, if not recently, arbitration was looked upon as a competitor to courts and formal procedure. The courts sought to guard their traditional prerogative and monopoly to the extent of creating a special branch tribunal with informal procedure. A larger view of the entire situation warrants the belief that arbitration is a modern device of the world of commerce come into being to supplement the courts, rather than to compete with them. New ways of living and transacting business imply new machinery in the law. Society is constantly devising new tools to accomplish its work more economically. Commercial disputes, aside from their technical nature, are different in an essential way. In the law the rendering of exact justice in the matter presented is a final aim. But in business the settlement of a given dispute is not the most important thing. The big thing is the relationship between the parties. In its formal tribunals the law must ignore this preservation of relations between the parties, however momentous. The essential difference appears to be that compulsion is the central feature of judicial procedure, while mutuality and voluntary submission underlie arbitration, giving it validity and affording a basis for successful continuance of business relations. Arbitration is thus seen as a constructive social function weaving into the fabric of commercial life to strengthen rather than sever its threads. There are difficulties enough in the way of general adoption of the idea in this country and it must be admitted that it cannot be done in a day or a year. We must have a more intensive organization of industry to afford the right soil for its growth. It will take time to gain recognition for experts in many lines of trade. |