It is nearly impossible to have a dialogue about arbitration that does not harken back to the problems so often decried by its users: It is expensive and it takes longer than anticipated. In response to this user experience, numerous studies have been conducted, best practice materials published, and rules revised. One method for streamlining arbitration that is rarely discussed is final offer arbitration, or FOA, in commercial and international practice. It is time to focus on this useful tool. FOA has several variations but, in its most basic form, it is a process in which the parties submit specific proposals for the resolution of the dispute, and the arbitrator must pick one of the proposals. This is the first of a two-part article. In Part 1, we provide an overview of FOA's evolution over the past 40 years and include examples of where this tool is currently used. In Part 2 next month, we will review the various forms of FOA, and offer practice pointers for parties and arbitrators to consider to assist them in designing and managing the most effective FOA process. While reports vary on when it first surfaced, modern-day references to FOA mostly emerged in the 1950s in the context of collective bargaining agreements in the United States. At the time, the use of strikes as part of the dispute resolution process became too unsettling-parties needed better tools to facilitate negotiations. In this context, FOA was seen as an ideal way to resolve impasse arising from union and management disputes over the terms of collective bargaining agreements.
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