Arbitration is an alternative dispute resolution (ADR) method of resolving legal disputes between parties. Arbitration is different than mediation because the neutral arbitrator has the authority to make a decision about the dispute.
• When is arbitration used?
Arbitration can be appropriate for a wide variety of situations. For example, there are many contracts that require the parties to arbitrate, rather than go to court. In addition, arbitration is sometimes used when opposing parties agree that litigation would be too expensive and time-consuming.
• How does the arbitration process work?
The arbitration process is similar to a trial in that the opposing parties present evidence to the arbitrator and the arbitrator makes a decision. Whether there is discovery, the type of discovery and the way the evidence is presented to the arbitrator is flexible depending on the arbitration contract (if any), the desires of the parties and the arbitrator’s decisions on these issues.
• What does the arbitrator do?
The arbitrator is similar to a judge in that he or she reviews the evidence, listens to each party and makes a decision.
• Is the arbitration process binding?
The arbitration process can be either binding or non-binding. When binding, the decision is final and enforceable by a court. In addition, with binding arbitration, parties give up their right to have their dispute heard by a judge or jury in the court system. With non-binding arbitration, the arbitrator’s award is advisory and can be final only if accepted by the parties.
• What are the benefits of arbitration?
Arbitration can be less costly than litigation and can provide a quicker resolution than proceeding through the court system. In addition, most arbitration awards cannot be appealed because they do not meet the extremely limited grounds for appeal of an arbitration award. This fact eliminates an appeal process that can indefinitely delay the final outcome of a case. Another benefit of arbitration is that the proceedings are private, and the final decision of the arbitrator is confidential. Another benefit is the ability to select a decisionmaker who has expertise in the subject matter of the dispute.
• How long does arbitration take?
It varies with each case. It’s possible to have a very short arbitration if the parties agree to present their evidence in writing, rather than have a hearing. When there is a hearing, which is more typical, it could take several months to conduct discovery and prepare for the hearing. The hearing itself can last anywhere from a day to more than a week, depending on the nature of the case.
