Individual and Corporate Dispute Resolution: Using Procedural Fairness as a Decision Heuristic

Two studies examined how litigants' evaluations of the outcome and process of lawsuits affected their judgments about the fairness of procedures and their acceptance of awards from court-ordered arbitration. The studies tested predictions concerning the operation of a "fairness heuristic"-that procedural justice judgments mediate the effects of process impressions and outcome evaluations on the decision to accept or reject the directives of an authority. Participants in the studies were corporate and individual litigants in federal tort and contract actions that were subject to court-ordered arbitration. In both studies the decision to accept the arbitrator's award or reject it and go to trial was strongly correlated with judgments of procedural justice, and much or all of the effect of outcome evaluations and process impressions on award acceptance was mediated by procedural justice judgments, which had a stronger effect than either subjective or objective measures of the arbitration award. Separate analyses of corporate and individual decision makers in the second study suggested that both groups relied heavily on procedural justice judgments in deciding whether or not to accept the arbitration award. The findings provide evidence of widespread use of a fairness heuristic and support the extension of justice-judgment research to corporate decision making.