First, if the nonmember knows he is in the wrong, yet the parties are unable to agree on a settlement, then having a neutral third party assess a penalty should enable him to minimize the reputation cost of his breach since arbitration awards are kept secret if the judgment is paid promptly. Although the arbitration's results sometimes become known through gossip, as long as the individual is not frequently involved in such controversies, the damage to his reputation is likely to be contained. Second, if the nonmember thinks he is in the right, arbitration is preferable to litigation because it is cheaper, faster, and subjects the member to unqiue pressures to pay promptly.

XREF: Relates to dispute resolution mechanisms and how private arbitration differs from public litigation in protecting reputation.

Lisa Bernestein, Opting out of the Legal Sys…, loc. 81