ARBITRATION
Definition: Arbitration is the submission of a disputed matter to an impartial person (the arbitrator) for decision.
The Process: Arbitration is typically an out-of-court method for resolving a dispute. The arbitrator controls the process, will listen to both sides and make a decision. Like a trial, only one side will prevail. Unlike a trial, appeal rights are limited.
In a more formal setting, the arbitrator will conduct a hearing where all of the parties present evidence through documents, exhibits and testimony. The parties may agree to, in some instances, establish their own procedure; or an administrating organization may provide procedures. There can be either one arbitrator or a panel of three arbitrators. An arbitration hearing is usually held in offices or other meeting rooms.
The result can be binding if all parties have previously agreed to be bound by the decision. In that case, the right to appeal the arbitrator’s decision is very limited. An arbitrator’s award can be reduced to judgment in a court and thus be enforceable. In nonbinding arbitration, a decision may become final if all parties agree to accept it or it may serve to help you evaluate the case and be a starting point for settlement talks.
How and When Arbitration Is Used: A common use of arbitration is in the area of labor disputes - between fire fighters and the city in wage disputes, for example. You will usually be represented by an attorney in arbitration.
Many contracts have clauses which require that disputes arising out of that contract be arbitrated. You may have seen such a provision when you applied for a credit card or opened a retirement account or other account with a stock broker. You may want to explore using this process if you and the other side agree that the problem needs to have someone make a decision but you do not want the expense of going through the court process. If you agree to arbitrate or sign a contract with an arbitration clause, you should understand that the arbitrator may make the final decision and that you may be waiving your right to a trial in court.
Who Provides This Service: Many attorneys, other professionals or professional associations offer their services as arbitrators. Typically your attorney will select the arbitrator based upon the particular type of the dispute. In complex and highly technical cases, often an arbitrator who is knowledgeable in that field is chosen. Usually fees are charged.
Some courts offer court-sponsored, nonbinding arbitration and have specific procedural rules to follow.
Characteristics of Arbitration:
◾Can be used voluntarily
◾Private (unless the limited court appeal is made)
◾Maybe less formal and structured than going to court, depending on applicable arbitration rules
◾Usually quicker and less expensive than going to court, depending on applicable arbitration rules
◾Each party will have the opportunity to present evidence and make arguments
◾May have a right to choose an arbitrator with specialized expertise
◾A decision will be made by the arbitrator which may resolve the dispute and be final
◾Arbitrator’s award can be enforced in a court
◾If nonbinding, you still have the right to a trial