A person who is found to have breached an agreement or engaged in unethical conduct is sometimes ordered to pay punitive damages or a fine in the form of a donation to charity in addition to compensating the other party for his loss. Thus, unlike court awards that, while unpredictable, are at least bounded by expectation damages, arbitration awards have a completely uncertain component. In one case, a dealer falsely accused another dealer of stealing a stone. The accuser subsequently remembered where he had put the stone and apologized to the other dealer. As the incident had become widely known throughout the club, however, the wrongly accused dealer brought an arbitration action against the owner of the stone for impugning his good name. The board ordered the man to make a full public apology and a fifty thousand dollar donation to a Jewish charity.

XREF: Connects to disputes about arbitration vs. court remedies, and how community-based justice systems differ from formal legal systems.

Lisa Bernestein, Opting out of the Legal Sys…, loc. 89