Arbitration Rules and Procedures

All parties must follow many rules and procedures in a traditional courtroom setting. Arbitrations and other alternative dispute resolution (ADR) methods are no different. They have their own rules and procedures that participants must follow, too. Yet, there are significant differences between arbitration rules and litigation rules.

This article discusses rules and procedures that apply to arbitration proceedings. Topics covered include:

• The number and selection of arbitrators
• Arbitration timelines
• Presentation of evidence at arbitrations
• Arbitration awards
• Confidentiality at arbitration proceedings

Arbitration can be adversarial, and help from an attorney can be a key support. Contact an ADR lawyer near you for tailored legal advice.

Establishing Rules and Procedures in Arbitration Proceedings

There is not one set of rules that governs every arbitration proceeding. This is because of the variety of arbitration services and the flexibility afforded to parties to draft their own rules. Often, the rules depend on whether the parties entered a pre-dispute or post-dispute arbitration agreement.

Most arbitrations follow a pre-dispute contract or written agreement with an arbitration clause. The arbitration clause outlines key aspects of any potential future arbitration. This includes the rules and procedures used in the arbitration.

Sometimes, the arbitration clause states that the Federal Arbitration Act (9 U.S.C. Sections 1-16) will provide the determining law. Companies often put pre-dispute arbitration clauses in consumer and employment contracts. These provisions may include waiving both sides’ right to a court trial and class action litigation.

Suppose the contract provides the parties with a third-party service to select the arbitrator and the rules. This could be the American Arbitration Association or JAMS (formerly Judicial Arbitration and Mediation Services). In that case, the contract may specify that the service’s established rules and procedures apply.

If the parties agree to arbitration post-dispute, the parties’ agreement will determine how to select the arbitrator and which rules will govern the process. Sometimes, arbitration arises as the result of a court order. Different rules may apply in that instance. Judicial or court-annexed arbitration may also be non-binding.

Number and Selection of Arbitrators

In a contract clause or agreement, the parties outline whether a single arbitrator or a panel of arbitrators will decide their dispute. The more complicated and significant an issue is, the more likely there will be a panel of arbitrators instead of a sole arbitrator.

Parties can choose to appoint arbitrators in many ways. They can do this by:

• Agreement
• Selecting from a list of neutral arbitrators
• Process of elimination

One of the main goals in selecting an arbitrator is ensuring impartiality. Parties are generally prohibited from having any ex-parte communications with the arbitrator. This occurs when a party communicates with the arbitrator outside the other party’s presence (or without the knowledge). If a party fails to honor this rule, they may need to select a new arbitrator.

Timelines and Presentation of Evidence at Arbitrations

Arbitration rules establish timelines for resolving a dispute. This includes the timing of notices and how long hearings will last.

Rules of evidence and civil procedure can be complex in ordinary litigation. They can become the source of legal disputes themselves and delay litigation. State and federal rules of evidence and civil procedure generally do not apply in arbitration. Pleadings and the presentation and admission of evidence is often more relaxed. There can also be less time to present and discover evidence, though.

Awards and Confidentiality of Arbitration Records

Rules often dictate the form of an arbitration award and any potential decision deadlines. Sometimes the American Arbitration Association (AAA) rules will dictate these things.

Likewise, rules may allow parties to keep and receive records of arbitration proceedings. Rules also dictate whether records remain confidential.

The Arbitration Process

Arbitration aims to streamline the process of resolving a legal disagreement. It also seeks to decrease costs compared with resolving a dispute in court. As noted above, arbitrations are all conducted differently.

With some important exceptions, arbitration is generally more informal than litigation. It often provides a more time-saving and cost-effective method for resolving legal disputes.

The beginning of the arbitration process involves one party giving notice to another of their intent to arbitrate a dispute. This includes informing the opposing party of the nature and basis for the proceeding. Often, the claimant must file written notice.

The other party then gets a period of time to respond in writing. The responding party indicates whether they agree to resolve their dispute via arbitration. They may also file a written notice of counterclaim.

The process begins if the parties agree that the dispute is suitable for arbitration. The rules and procedures selected by the parties or specified by the parties’ contract apply. There may be pre-hearings or an expedited process. If the parties disagree on appointing an arbitrator or arbitration panel, there may be time to select a new one.

Why Is Arbitration Faster Than a Lawsuit?

One of the reasons arbitration moves at a quicker pace than litigation is the limited discovery and pretrial filings. This can significantly reduce the paperwork involved. In contrast, discovery in traditional litigation can be burdensome and add to litigation costs.

The purpose of discovery is to allow for exchanges of documents and evidence between parties to a dispute. An arbitrator can take a more active role, curtail the excesses of traditional discovery, and impose time limits. An arbitrator can compel the production of documents or witness attendance by issuing subpoenas. An arbitrator can also extend deadlines or offer postponements for good cause.

After the discovery permitted by the rules or the arbitrator, the conduct of the arbitration hearing is like a courtroom trial. Parties call witnesses and present evidence. They make arguments to support or defend their respective positions. But the rules for an arbitration hearing may differ from those of a courtroom. Opportunities to question or cross-examine witnesses may be more limited.

Once the hearing ends, an arbitrator or panel has a certain amount of time to consider the matter. The arbitrator issues a decision called the award. An arbitrator’s award may order payment of attorney fees by one or both parties. A final award is normally binding on both sides and enforceable in a court. Sometimes, the parties may agree to amendments.

Can A Court Overturn An Arbitration Award?

What can a party do if they are not satisfied with an arbitrator’s decision? In rare cases, the court may overturn an arbitration award. The court’s jurisdiction in such matters is very limited. Normally, a party must show fraud, corruption, or bias by the arbitrator against such party. Sometimes, the award falls so far outside the parameters of the law at issue that a court may invalidate it as well.

Considering Arbitration? Talk to an Attorney First

Meeting with a lawyer can help you understand the arbitration process. You can learn more about arbitration procedures and arbitration fees. Most importantly, having an attorney in your corner can be critical in binding arbitration, where decisions are harder to challenge.

FindLaw’s directory of ADR attorneys can get you started. Enter your city or ZIP code for a list of qualified legal professionals near you. Because state law is relevant, your attorney should be licensed in your state. Your search results will also show important details about prospective lawyers, like ratings and contact information.