The Arbitration Process

Arbitration is a form of alternative dispute resolution that is useful in solving legal disputes without going through a court trial. The process is often less intimidating and can save time and money by resolving a legal issue without the formalities of a court case. Plus, arbitration is confidential, whereas litigation is not.

Anyone facing the possibility of arbitration should know how it works and what to expect during the process. It is like a traditional court case but differs in key ways.

Using Arbitration to Resolve Legal Disputes

In some cases, disputes that might otherwise go to court benefit from confidential arbitration. Although several kinds of alternative dispute resolution (ADR) are available in most states, arbitration is often chosen. Arbitration is popular because it has a streamlined process. This process allows parties to a dispute to present evidence to a neutral third party, who then rules on the issue.

The Arbitration Process is Flexible

Arbitration is usually quicker and less expensive than the typical court case. The arbitration process is less technical and more flexible than the court system. The parties have a greater degree of control over the timing and parameters of the case. Arbitrators often have more experience with the specific subject matter of a dispute than judges, who hear all kinds of cases.

Mandatory Arbitration

Arbitration is most often voluntary. Yet, certain contract and commercial disputes have mandatory arbitration clauses. Arbitrations often emerge from contractual clauses requiring arbitration of disputes rather than suing. Arbitration provisions may include:

• Clauses that control the arbitrator's selection
• Format of the hearings
• Procedural rules
• Rules of evidence
• The controlling law
• The venue where the arbitration takes place

A Binding Decision

The Federal Arbitration Act holds that an arbitrator's decision is as binding on the parties as a court judgment. Claimants can't sue in court because they disagree with the arbitration award. Arbitration law says an award can only get set aside in limited circumstances, such as fraud or arbitrator bias.

Before the arbitration hearing, the parties may agree that the arbitrator's decision will be non-binding. With non-binding arbitration, the parties may pursue other remedies after the arbitration, such as agreeing to the arbitrator's decision or proceeding with litigation.

Arbitration Rules and Process

No single set of rules or arbitration procedures applies to all cases. The parties may select their process. Professional arbitrators can develop rules and procedures depending on the arbitration service. The parties may elect to follow the rules and procedures of an administrating authority, like JAMS or the American Arbitration Association (AAA).

The arbitration process generally includes the following steps:

• Each party submits initial pleadings stating their claims or defense and agrees to arbitration.
• All arbitrations involve an arbitrator or arbitral tribunal who directs the hearings and renders judgment.
• The parties select and agree on the arbitrators. This may be an agreement by the parties, a choice from a list, or a recommendation from their attorney or local bar association.
• The parties agree on an arbitration timeline and schedule. Parties set a location and dates, as well as the arbitration rules.
• The discovery process happens in arbitration. The rules for admissible evidence and evidence introduction are more flexible than the rules in court. But, there is usually less emphasis on evidence in arbitrations. There is also less time to discover or present evidence.
• Trial preparations happen before the hearing.
• The arbitration hearing happens. Both parties present their cases and evidence to the arbitrator or arbitral tribunal. The parties may call witnesses and conduct cross-examinations, but this is much more limited than with a court trial.
• The arbitrator issues a decision or award. The agreed-upon rules usually limit arbitration awards. The arbitrator's decision is binding on the parties and legally enforceable unless they decide to make it non-binding before the hearing.
• Arbitration cases are confidential, unlike court proceedings.

The arbitrator's fees are typically split between the parties unless they agree otherwise.

You Don't Have To Solve This Alone: An Attorney Can Help

Meeting with a lawyer can help you understand your options and how to protect your rights. An attorney can review your claim and provide legal advice.