In complex cases that are neither explicitly covered by the trade rules nor dealt with according to established custom, it is difficult to determine what substantive rules of decision are applied. Arbitrators explain that they decide complex cases on the basis of trade custom and usage, a little common sense, some Jewish law, and, last, common-law legal principles. There are no general rules of damages. When calculating damages, the arbitrators look at the stone, consider the circumstances, and apply their business experience. Many dealers feel that the arbitrators have redistributive instincts; they cite the unpredictability of the decisions as well as the arbitrators' tendency to "split the difference" as an important motivation to settle their disputes on their own. This may be a reason why, while 150 arbitration complaints are filed each year, only thirty to forty go to judgment. The arbitrators announce their judgment, but they neither make findings of fact nor explain their reasoning. The absence of explicit findings of fact and written opinions is a precaution to prevent people from complaining, rightly or wrongly, that the arbitrators were biased, unfair, or relied on evidence that lacked probative value.

QUESTION: This is a fascinating account of a diamond-trade arbitration system. Worth exploring how opaque, low-accountability adjudication might work in other community-governance contexts.

Lisa Bernestein, Opting out of the Legal Sys…, loc. 88