What Is Arbitration?
Arbitration is an
Alternative Dispute Resolution process whereby a person chosen as
the arbitrator resolves the disagreement between parties.
Arbitration is similar to a court trial, with several exceptions:
1) The arbitrator (or
panel of arbitrators) make(s) the decision called an "arbitration
arbitration does not take place in a courtroom.
arbitration award is binding. With rare exceptions, there is no right
is not a matter of public record. The proceedings are private and
confidential. Generally there is not a court reporter or written
5) Discovery or
the process by which lawyers generally prepare their cases is
extremely limited and subject to agreed upon guidelines.
6) The rules of
evidence are relaxed so that the parties have a broader scope, more
expanded opportunity to tell their stories;
7) With very few
exceptions, it is much less expensive than legal litigation.
arbitration time frame is substantially less than that of litigation
and going to trial.
9) No jury. The
Arbitrator(s) maintain neutrality and conflicts of interests.
all paperwork and evidence presented are destroyed after the
Arbitration and Arbitration Award does not have to adhere to Judicial
Case precedent nor formality of traditional court proceedings.
What Is The Difference Between Mediation And
Mediation is a
voluntary alternative dispute resolution process. All parties must
consent to participate in good faith and work toward a mutually
agreeable resolution. Mediating parties are not bound to resolve their
dispute. However once a resolution is reached, it can be made binding
if the parties decide to draft a contract called a settlement
agreement. Mediations are not "decided" in favor of one
party or another; rather, the mediator simply facilitates the
negotiation process. The parties decide their own outcome.
Arbitration is a
non-voluntary alternative dispute resolution process. Unlike
mediation, a knowledgeable, independent, and impartial third party is
empowered to make a decision. The arbitrator hears the disagreement
between one or more parties and after considering all relevant
information renders a final decision in favor of one of the parties.
Arbitration decisions may be either binding or non-binding, depending
on the terms of the arbitration agreement. Binding arbitration
decisions may be confirmed by a court and carry the same significance
as a court judgment.
Why Use Arbitration Over Legal Litigation?
generally less expensive than legal litigation and provides for faster
resolution through flexible scheduling and simpler rules. Arbitration
results are confidential, only made public with the consent of the
How Is Arbitration Different From A Trial?
The outcome of a trial
can usually be appealed. Arbitration usually cannot be appealed.
Arbitration is usually less formal than a trial. The rules of evidence
may or may not be followed, depending on what guidelines the parties
agree to. An arbitrator can be more flexible than a judge, because
before the arbitration begins, both sides can agree to what guidelines
and structure the arbitrator is to consider and follow in rendering
the ‘arbitration award’.
What Types Of Disputes Can Be Arbitrated?
Any type of
disagreement can be arbitrated, including contract disputes involving
businesses and consumers, domain name disputes, employment claims,
real estate and construction issues, and tort and civil rights
matters. Generally, arbitration is utilized when there is some sort of
adversarial situation and continuing an amicable relationship is not a
What Are The Benefits Of Arbitration?
of arbitration include:
resolution and closure to complex issues
- Lower costs
- Privacy and
confidentiality of issues and parties
- Quick process
avoiding court back-logs
maintain more control over the proceedings than litigation
for Parties to express their interests without objections
- Limited case
precedent and legal procedures
- Ability to
Do I Need A Lawyer?
Although it is more
informal than court trial, arbitration is an adversarial process. You
do not need a lawyer, however it is advisable to retain one since the
process is adversarial and binding. The expenses of retaining a lawyer
is assumed by each party unless there are provisions agreed to prior
to arbitration. Each party will be required to present their position
and interest by calling witnesses and presenting documentary evidence,
and making arguments to persuade the arbitrator to rule in its
Who Pays The Arbitration Cost?
The cost will vary
depending on the arbitrator’s fee, the complexity of the case, and
the length of the arbitration. Arbitrator(s) or Arbitration
Association will charge the parties for pre-hearing conferences and
review of documents, as well as time spent preparing the award. There
may be an administrative expense if the parties go through an
Arbitration Association. The arbitration award the amount of the
judgment, and/or other costs to each party.
How Long Does Arbitration Last?
It usually takes
several weeks to months for parties to do the necessary discovery and
other research to prepare for the arbitration hearing. The arbitration
hearing itself will last anywhere from one day to a week. Generally
the more complex the issues are, the longer an arbitration hearing
Do I Give Up Any Rights By Agreeing To Binding
Generally you give up
the constitutional right to have your disagreement decided in court of
law by a judge or a jury in the court system. Under a few limited
circumstances, such as after-discovered bias on the part of the
arbitrator, arbitrary and capricious decisions, or newly-discovered
evidence, a party may ask the court to reconsider or overturn an
arbitrator’s decision. Most arbitration awards are binding. There
are some exceptions, for example, in workplace matters. You do not
give up the right to bring your claim before the EEOC, which may
choose to pursue the matter on its own.
Who Serves As The Arbitrator?
The Arbitrator is an
experienced person both parties agree to. The arbitrator takes the
place of a judge and jury and listens to the facts presented by the
parties, applies the relevant law, and determines the decision on an
award. Individuals who serve as arbitrators typically possess certain
qualifications or minimum levels of experience to maintain the
integrity of the arbitration process. These individuals do not have to
be from a legal background. Unlike a judge, arbitrators are paid by
the parties, not by the government. A person who has served as a
Mediator may not later serve as an Arbitrator, unless specifically
agreed in writing by both parties.
How Do I Start The Arbitration Process?
If you have signed a
contract already containing an arbitration clause, you should read and
follow the requirements in the contract. Even though there may be an
arbitration clause, this does not prevent both parties from utilizing
mediation to settle their disagreement prior to arbitration. In
mediation, both parties have control of the outcome whereas in
arbitration an arbitrator makes a binding decision. Like litigation,
arbitration may negatively impact an existing relationship.
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