Final Offer Arbitration: An Innovative Institution in the ADR Market
Final Offer Arbitration: An Innovative Institution in the ADR Market

Summary/Abstract: In this paper, we present a new form of arbitration called the Final Offer Arbitration (FOA), which is insufficiently known to the domestic public. It is a form of arbitration that was initially used in American practice for solving labor disputes in the field of sport and the public sector. Since its inception, it has attracted the attention of scholars and researchers who have started to examine its efficiency in relation to the traditional form of arbitration. In this context, we first present current theoretical and empirical knowledge about the advantages of the traditional arbitration over litigation. Then, we focus on the comparative advantages of the final offer arbitration in relation to the traditional arbitration, primarily in terms of its efficiency. An issue of particular interest is which of these two models of arbitration, the traditional or the innovative one, provides stronger incentives to the disputing parties to enter the process of negotiation and final settlement.

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