Thursday, March 26, 2015

Rapid Arbitration in Delaware

Delaware lawmakers are moving quickly to approve legislation streamlining the closed-door resolution of corporate disputes, after an earlier state-sponsored secret arbitration program was struck down as unconstitutional by a federal court. Delaware lawmakers previously passed legislation allowing state judges to preside over private corporate arbitration proceedings. The Delaware Coalition for Open Government challenged the program on constitutional grounds, arguing that citizens have a First Amendment right to access court hearings. The new legislation cleared the Senate Judiciary Committee without debate and already passed the House. Delaware Senators were expected to take up the measure and send it to the governor for signature this week. The bill's supporters say the revised rapid arbitration process doesn't run afoul of the Delaware or U.S. Constitution because, unlike the earlier secret arbitration scheme, the new program would not be run by sitting state judges. Delaware's Chief Justice advocated for a new arbitration program, and the legislation was drafted by a committee of the Delaware State Bar Association. A longtime corporate darling, Delaware is legal home to more than 1 million corporate entities, and more than two-thirds of Fortune 500. Corporations choose Delaware for access to friendly business laws and the Delaware Chancery Court, which is widely recognized for its judicial expertise in matters of corporate law. The new legislation requires resolution of arbitration disputes in 180 days or less, and gives the parties flexibility in choosing expert arbitrators. Other provisions also allow for the speedy resolution of disputes, which state officials claim offer Delaware another advantage as a legal home for corporate entities. See stories here-- and