Using Arbitration to Resolve Legal Disputes
Created by FindLaw's team of legal writers and editors | Last reviewed June 20, 2016
Civil court lawsuits and trials are the traditional method for resolving accident and injury disputes. However, concerns about court congestion and delays, rising litigation costs, and the negative psychological and emotional impact of litigation have increased the use of alternative dispute resolution (ADR) techniques. Arbitration is one of the more frequently used ADR processes. For anyone considering the use of arbitration, it is important to understand how the process works in the context of what they want to accomplish..
The Benefits of Arbitration
Arbitration is the most formal alternative to litigation. In this process, the disputing parties present their case to a neutral third party, who renders a decision. Arbitration is widely used to resolve disputes in both the private and public sector.
Arbitration is generally considered a more efficient process than litigation because it is quicker, less expensive, and provides greater flexibility of process and procedure. The parties often select the arbitrator and exercise control over certain aspects of the arbitration procedure. Arbitrators typically have more expertise in the specific subject matter of the dispute than do judges. They may also have greater flexibility in decision-making.
Traditional Arbitration Model
Under the traditional arbitration model, parties voluntarily participate in the arbitration process. Their participation may be the result of a preexisting contractual provision or an agreement that occurs after the dispute has arisen.
Arbitration agreements generally provide a means for selecting the arbitrator or panel of arbitrators, the format of the hearing, the procedural and evidentiary rules to be used, and the controlling law. If these details are not provided for in the contract, the parties may seek assistance from agencies that administer arbitrations.
The Arbitration Process
Typically, a party initiates the arbitration process by sending the other party a written demand for arbitration. The demand generally describes the parties, the dispute, and the type of relief sought. The opposing party usually responds in writing, indicating whether they believe the dispute is arbitrable. If the dispute is arbitrable, the parties then select an arbitrator or panel of arbitrators.
In most jurisdictions, the format for arbitration is similar to a trial. The parties make opening and closing arguments, present testimony and witnesses, and offer documents. The evidentiary rules, however, are not applicable and the discovery and cross-examination opportunities are limited.
Forms of Arbitration
Compulsory arbitration has grown in the United States particularly in the areas of public sector employment disputes, court-annexed programs, and medical malpractice disputes. Several states have enacted legislation requiring critical public employees such as police, teachers, and firefighters to participate in arbitration as the final step in negotiating the terms of their collective bargaining agreements. Additionally, court-annexed arbitration has become compulsory for certain categories of civil cases in several state and federal district courts.
Court annexed arbitration differs from the traditional arbitration model in several ways. It often requires parties to arbitrate rather than voluntarily participating. Parties have a right to a trial if they are not satisfied with the arbitrators' award, but in some systems parties must pay court cost or arbitrators' fees if they do not have a better outcome at trial. Regardless of the type of arbitration being considered, it is important to be fully aware of the benefits offered and any restrictions that may be encountered when using arbitration to resolve legal issues.
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