Should I Use Arbitration To Resolve My Legal Dispute?

Arbitration is a form of alternative dispute resolution (ADR). It provides an alternative to civil court lawsuits and trials, the traditional method for resolving legal disputes. There’s been an increase in the use of ADR techniques to resolve disputes due to concerns about:

• Court congestion and delays
• Rising litigation costs
• Litigation’s negative psychological and emotional impact

If you’re considering arbitration, it’s essential to understand how the process works in the context of the legal dispute you’re facing. This article discusses the benefits of arbitration, the traditional arbitration model, the arbitration process, and forms of arbitration. 

While arbitration is more flexible than litigation, it can still be complex to navigate. Additionally, some arbitration decisions are binding. Talk to an attorney near you to review your options and make sure arbitration is the best fit for your situation.

The Benefits of Arbitration

Arbitration is the most formal alternative to litigation. In the arbitration process, the disputing parties present their case to a neutral third party. The neutral third party renders a decision. Disputing parties use arbitration to resolve claims in both the private and public sectors.

In general, arbitration is a more efficient process than litigation. This is because it is:

• Quicker
• Less expensive
• Provides greater flexibility in process and procedure

In arbitration, the parties often select the arbitrator. They can also exercise control over aspects of the arbitration procedure. Arbitrators typically have more expertise in the specific subject matter of the dispute than judges. They may also have greater flexibility in decision-making.

The Traditional Arbitration Model

Under the traditional arbitration model, parties voluntarily participate in the arbitration process. Participation may result from a preexisting contract provision. Parties can also enter into an agreement to arbitrate after a dispute has arisen.

Arbitration agreements address the process for hearing and resolving a dispute. It’s important to read the fine print before you sign one. These agreements generally provide a method for determining the following:

• The arbitrator or panel of arbitrators
• The format of the hearing
• The procedural and evidentiary rules in effect
• The controlling law

If the contract’s arbitration clause or arbitration provisions don’t provide these details, the parties may seek help from agencies that administer arbitrations. Common agencies include the American Arbitration Association (AAA) and JAMS. An arbitration agreement may specify both the agency and the arbitration rules that will govern the dispute.

The Arbitration Process

In most cases, a party initiates the arbitration process by sending the other party a written demand for arbitration. The demand describes:

• The parties
• The dispute
• The type of relief sought

The opposing party usually responds in writing, indicating whether they believe the dispute is arbitrable. If the conflict is arbitrable, the parties select an arbitrator or panel of arbitrators known as an arbitral tribunal.

In most jurisdictions, the format for arbitration is like a trial. The parties:

• Make opening statements and closing arguments
• Present testimony and witnesses
• Offer documents

Notably, the rules of evidence that apply to trials do not apply to arbitration proceedings. Discovery and cross-examination opportunities are also limited. Arbitrators can order parties to submit to depositions and other pre-hearing discovery at their discretion.

In most cases, people engage in binding arbitration. This means that an arbitrator issues a binding decision. There may be limited opportunities for appeal.

Forms of Arbitration

There are different forms of arbitration. Some systems give you a choice about whether to arbitrate, while others require it as part of a contract or court program. 

Compulsory Arbitration

Compulsory arbitration is growing in the United States. Compulsory arbitration means mandatory arbitration. This is particularly true in the areas of:

• Public sector employment disputes
• Court-annexed programs
• Medical malpractice disputes
• Credit card disputes
• Consumer product disputes

Court-Annexed Arbitration

Several states have legislation requiring critical public employees such as police officers, teachers, and firefighters to arbitrate as the final step in negotiating the terms of their collective bargaining agreements. Court-annexed arbitration, also known as court-mandated arbitration, is compulsory for specific categories of civil cases in many state and federal district courts.

Court-annexed arbitration differs from the traditional arbitration model in several ways. It often requires parties to arbitrate. Parties have a right to a trial if they aren’t satisfied with the arbitrator’s decision or their arbitration award. In some systems, though, parties must pay court costs or arbitrators’ fees if they don’t have a better outcome at trial.

Regardless of the type of arbitration under consideration, it’s essential to be fully aware of the benefits and any restrictions you may encounter when using arbitration to resolve legal issues.

Questions About Arbitration? Get Legal Help

Arbitration cases often resemble standard litigation. Meeting with a lawyer can help you understand whether an alternative dispute resolution process, such as arbitration, makes sense in your case.

Arbitration is only one of several alternative dispute resolution methods. An attorney can guide you through the different dispute resolution procedures available to you. They can help you reach conflict resolution, whether that means moving forward with court proceedings, an arbitration hearing, or another route.

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 potential lawyers, like ratings and contact information.