Delaware Rapid Arbitration Act–After A Decade, Has Its Day Arrived?

In 2015, Delaware adopted a new statute, the Delaware Rapid Arbitration Act (the "DRAA"), designed to address an identified need of parties for a very rapid and streamlined way to address disputes confidentially and outside the four walls of a courtroom. This new statue replaced an earlier statutory scheme that would have used sitting jurists of Delaware's famed Court of Chancery as decisionmakers in private arbitrations because that statute was found to violate the constitutionally-protected access of the state's citizens to "open courts."

Over the course of the next few weeks, we'll explore in this blog the history behind the DRAA, its key features, the kinds of disputes that are best suited for resolution under the act, how to adopt the DRAA in contracts, and some practice tips for presenting and resolving disputes under the DRAA.

While the DRAA has been in place for a decade now, there is little data beyond anecdotal evidence for how often this type of ADR is happening "in the wild." Rumors are, however, that it has not been used with the frequency that its original proponents had envisioned. But the winds appear to be changing.

The Court of Chancery has seen rapidly-rising case loads year-over-year, a pace that show no signs of slowing. The addition of chancellors (from 5 to 7) and magistrates in chancery (from 1 to 5) has done little to lighten the collective load for those judges. That rise in case load has also been accompanied by a material increase in the number of cases that are being filed that seek expedited treatment–which comes with the concomitant upheaval to the dockets of the individual chambers to which they are assigned.

The DRAA, if adopted by more parties in their agreements, could play a key role in both (a) allowing parties with certain types of disputes access to a very quick (120 days) and streamlined ADR procedure, and (b) perhaps, help take some of the case load off the shoulders of the Delaware courts and place it in the hands of private arbitrators. Last week, the Delaware State Bar Association and Delaware ADR, LLC put on a day's worth of CLE panels, two of which specifically discussed the DRAA. Indeed, two of the former judges on the panels noted that in recent months they have each completed an arbitration for parties under the DRAA–so there have been recent sightings of DRAA proceedings in the wild! The CLE event had the flavor of a "re-launch" for the DRAA, and it is a statue worth highlighting and discussing.

So watch this page over the coming weeks as we walk through the DRAA–particularly when and how it might be useful for parties to adopt as their ADR method for disputes.

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