Do I Need a Lawyer for Arbitration?

The short answer is no, you do not need a lawyer in arbitration. However, because the dispute resolution process is adversarial in nature, and the outcome is often final and affects your rights, you may want a lawyer's help in preparing and presenting your case.

What Is Arbitration?

Arbitration is an alternative to litigation, the traditional court resolution process. It takes place outside of the courtroom, usually in a conference room. Instead of a judge, there is a neutral third-party arbitrator.

Arbitration is appreciated as being less formal and expensive than litigation, though the price depends on the arbitrator used. Some can be very expensive. It is also believed to be a faster way to resolve disputes because the parties do not have to wait for their turn on the court's docket.

What Is the Arbitration Process?

The arbitration process involves the parties submitting their dispute to an impartial arbitrator, who serves as an informal judge. The arbitrator hears both sides of the argument at the arbitration hearing, makes a decision, and issues an arbitration award.

While there are specific arbitration rules, there are no formal rules of evidence or motion practice in arbitration. In other words, unlike court, you don't have to know the rules for collecting and submitting evidence, and you don't have to write long documents explaining what happened.

However, you may be allowed to do informal discovery (investigate your case and collect evidence) to produce relevant documentation. You might also take depositions (interview witnesses). Testimony during arbitration is given under oath, similar to in court.

What Is Mandatory Binding Arbitration?

People often agree to mandatory binding arbitration when they sign a contract. One party might put an arbitration clause in the fine print as a way to protect themselves from courtroom lawsuits. Through this clause, the parties agree to arbitrate any disputes that arise and to not pursue the regular court process.

In other words, in an arbitration agreement, the parties agree that they will not sue. Furthermore, they agree that the arbitrator's decision will be final, and they waive their right to appeal the decision if they don't like it.

The entire arbitration process is private and not open to the public. The arbitrator's decision is also confidential, though it can be made public if one party needs to get the court involved for enforcement purposes.

Why You Might Want a Lawyer During Arbitration

Here are some reasons you might want a lawyer for your arbitration:

1. The Decision Will Affect Your Rights

The main reason you may wish to have an attorney represent you in arbitration proceedings is that it is a legal process that affects your legal rights. Additionally, in binding arbitration, you don't get a second chance, or the opportunity to appeal, if you don't like the outcome. The arbitrator's decision is final.

2. It Can Be Hard to Plead Your Case Without a Lawyer

It can be more difficult than people realize to present their case in a compelling way without legal advice. This is especially true if a law or statute applies in your case, such as an employment claim involving race, age, or national origin discrimination. A lawyer can help you create an argument that is supported by fact and law.

3. Arbitration Often Favors Large Companies and Employers

In many cases, arbitration is triggered as part of a contract. Large companies such as banks and credit card companies are infamous for including mandatory arbitration clauses in their contracts with customers so that customers are forced to use arbitration instead of litigation if they are wronged.

Unfortunately, arbitration often works in favor of the more powerful party such as a large company or employer. This is another reason people find it helpful to have an attorney — they can help level the playing field.

4. The Other Party Might Be More Familiar With Arbitration

In fact, the other party might be so used to arbitration that they know the specific arbitrators. A large corporation, for example, might have lawyers dedicated to arbitration and keep a list of arbitrators who tend to support businesses more than individuals. If you are up against a corporate lawyer who knows the process like the back of their hand, you may want a similar lawyer on your side.

5. The Decision Will Significantly Affect You

One thing to consider when deciding to hire an attorney to represent you during arbitration is the effect the outcome will have on your life. If you are not very concerned about a potentially negative outcome, then you might not need an attorney. But if the outcome will have an important effect on your life, such as whether you get to keep your job or whether you might lose a significant amount of money — the American Arbitration Association recommends that you should at least consult with an attorney beforehand.

How to Find an Arbitrator

Who your arbitrator is depends on whether arbitration is happening because of a clause that requires it or because you and the other party have chosen arbitration as an alternative dispute resolution process.

Usually, arbitration clauses specify who the arbitrator will be in your case or the process for choosing an arbitrator. If you are deciding to use the arbitration process on your own, there are resources you can look at to find a qualified arbitrator including the American Arbitration Association's National Roster of Arbitrators and Mediators. You should always seek an arbitrator with experience handling disputes within the subject matter of your case.

Your lawyer can also help you find an arbitrator who is fair and does a good job. That is another reason it is a good idea to get a lawyer's input.

Typically, arbitrators have experience as lawyers or judges, and some states require arbitrators to hold a law license or be members of the state bar association. But not every state requires arbitrators to be licensed, registered, or certified.