Final Offer Arbitration: Time for Serious Consideration by the Courts

This article examines final offer arbitration and recommends its use in court-annexed arbitration programs, which are now operating or being considered in a growing number of federal and state courts. The first portion of the article analyzes the process of the settlement of lawsuits and gives some reasons why settlements are not always reached expeditiously. Next, the article analyzes the final offer arbitration process and shows how it may promote settlement. The last portion of the article examines empirical data on the efficacy of final offer arbitration in promoting settlement.

The empirical data comes from two sources: laboratory experiments and field studies. While the laboratory experiments provide strong support for the conclusion that final offer arbitration encourages settlement, the field studies are inconclusive.