The Arbitration Process

Arbitration is an alternative dispute resolution (ADR) method to end a civil legal dispute without going to trial. Arbitration is a way of resolving disputes outside of a courtroom. This can avoid the expense and uncertainty of a trial. 

This article provides an overview of arbitration. ADR processes can be different depending on where you live. For more information on arbitration, contact a local and experienced alternative dispute resolution lawyer. 

What Is Arbitration?

Arbitration is a form of alternative dispute resolution (ADR) like mediation. The arbitration process generally includes:

• Choosing a neutral third party, known as the arbitrator, to hear the issue
• Both sides presenting testimony and evidence to the arbitrator 
• The arbitrator or arbitration panel issuing an arbitration award

One key difference between mediation and arbitration is that an arbitrator’s decision is often binding. But some arbitration is non-binding. If the disputing parties have agreed to binding arbitration, courts will typically enforce the decision.

A lawyer can help you determine whether arbitration or other ADR methods are appropriate for your dispute. 

When Do You Use Arbitration?

Arbitration is frequently used in contract or agreement disputes. This dispute resolution method is increasingly popular in other types of cases. Most civil cases allow you and the other party to choose arbitration to resolve your dispute. Some contracts and agreements may require arbitration.

What Are Arbitration Clauses?

Some contracts or agreements include a section known as the arbitration clause. With this, you agree in advance to handle any disputes through arbitration instead of court litigation.

These clauses are commonly found in business transactions. A business providing a service or product may require disputes to go through arbitration. International business agreements typically have arbitration clauses as well.

Arbitration clauses can be problematic in instances of sexual harassment or employment issues because they leave you with limited options if you lose. Because of this, states like California and New York have limited arbitration clauses in some employment disputes.

When Does the Court Order Arbitration?

Some state and federal courts require court-ordered arbitration for certain issues. ADR can reduce court backlogs. A growing number of states require this form of alternative dispute resolution for auto insurance claims and employment disputes.

Court-ordered arbitration is generally non-binding. In non-binding arbitration, a party who doesn’t like the dispute’s resolution may choose to go to trial. However, some jurisdictions may hold you responsible for court costs and arbitration fees.

What Are the Benefits of Arbitration?

Arbitration hearings are not public records. They don’t happen in a courtroom, which allows you to have greater privacy.

Generally, arbitration is faster and less expensive than litigating an issue in court. Because arbitrators don’t always have the same heavy caseload as judges, the process is generally more streamlined. You may avoid attending multiple hearings, which will save you from paying the legal costs and fees. 

Arbitrators typically know the subject matter involved. They have experience with conflict resolution and the rules of evidence. Arbitrators can also foster a collaborative and facilitative environment. 

Arbitration may feel more fair because both parties agree on who will conduct a neutral evaluation. This allows both sides to pick an arbitrator who is more familiar with the type of issue in dispute.

Are There Disadvantages of Arbitration?

Depending on your situation, arbitration isn’t always the best option. Since the arbitrator’s decision is binding, you may have no choice but to comply with the final decision. This may mean you recover nothing for your losses, or you might be bound to compensate the other party. You may have no further options or the ability to bring the claim again.

Others may feel this process lacks transparency since arbitration is private and not a matter of public record. When arbitration involves a large entity, consumers or employees often feel they have less power. This opens the possibility that the arbitrator may not actually be as objective or neutral as they appear.

Although arbitration can be less costly, some arbitration adjudication may be more expensive than traditional litigation. Arbitration fees and administrative costs may be more than the cost of pursuing a lawsuit.

How Can an ADR Lawyer Help?

A local and experienced alternative dispute resolution lawyer can guide you through the arbitration process. They can even represent you before an arbitrator and help you gather all of the necessary evidence. Contact an arbitration lawyer today if you are facing the possibility of arbitration proceedings.