Do I Need a Lawyer for Arbitration?

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

Arbitration is often used as an alternative to a lawsuit in personal injury cases, real estate matters, employment law cases, fee disputes, and family law matters.

This article defines arbitration and discusses the arbitration process. The article also addresses binding arbitration. Finally, reasons you might want to be represented by a lawyer during arbitration are addressed.

What Is Arbitration?

Arbitration is an alternative to litigation. Litigation is the traditional court resolution process. In contrast, arbitration takes place outside the courtroom, usually in a conference room. Instead of a judge, there is a neutral third-party arbitrator. Arbitration is, therefore, a type of alternative dispute resolution (ADR).

Arbitration is less formal and expensive than litigation, though the price depends on the arbitrator used. Some arbitration fees are very high. Arbitration is usually a faster way to resolve disputes and avoid the court system. The parties don't have to wait for their turn on a court's docket.

What Is the Arbitration Process?

The arbitration process involves parties submitting their dispute to an impartial arbitrator. The arbitrator serves as an informal judge. The arbitrator hears both sides of the argument at the arbitration hearing. The arbitrator then 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. You don't have to know the rules for collecting and submitting evidence like you would in a court proceeding. Similarly, you don't have to write long documents explaining what happened.

You might be allowed to do informal discovery to produce relevant documentation. This could include investigating your case and collecting evidence. You might also take depositions, which is when you 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 contract to protect themselves from courtroom lawsuits. Through this clause, the parties agree to arbitrate any arising disputes and not pursue the regular court process.

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

The entire arbitration process is private and not open to the public. The arbitrator's decision is 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

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

The Decision Will Affect Your Rights

You might want to have an attorney represent you in arbitration proceedings because arbitration is a legal process that affects your legal rights. 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.

It Can Be Hard to Plead Your Case Without a Lawyer

It can be more complicated than people realize to present their case compellingly 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 craft an argument supported by facts and laws.

Arbitration Often Favors Large Companies and Employers

Arbitration is often triggered as part of a contract dispute. Large companies like banks and credit card companies are known to include mandatory arbitration clauses in their contracts with customers. This forces customers to use arbitration instead of litigation if they are wronged.

Unfortunately, arbitration often works in favor of the more powerful party. The more powerful party is usually a large company or employer. This is another reason people find it helpful to have legal representation. An attorney can help level the playing field.

The Other Party Might Be More Familiar With Arbitration

The opposing party might be so used to arbitration that they know the arbitrators. A large corporation, for example, might have lawyers dedicated to arbitration and keep a list of arbitrators tending to support businesses more than individuals. Suppose you're up against a corporate lawyer who knows the arbitration process inside and out. In that case, you may want a similar lawyer on your side.

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. You might not need an attorney if you're not concerned about a potentially negative outcome. Suppose the outcome will substantially affect your life, like whether you get to keep your job or might lose a significant amount of money. In that case, the American Arbitration Association recommends at least consulting 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're deciding on your own to use the arbitration process, there are resources you can look at to find a qualified arbitrator. One resource is the American Arbitration Association's National Roster of Arbitrators and Mediators. 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's another reason getting a lawyer's input is a good idea. Typically, arbitrators have experience as lawyers or judges. Some states require arbitrators to hold a law license or be state bar association members. Non-lawyers can also be arbitrators. Only some states require arbitrators to be licensed, registered, or certified.

Seek the Advice of a Lawyer

Understanding the ins and outs of arbitration can be confusing. Meet with an arbitration lawyer in your area to obtain legal services and ensure your rights are protected.