What is Arbitration?
Arbitration is a process by which the parties present their cases to a neutral who issues a decision based on the facts of the case and the applicable law. Unlike mediation, an arbitrator’s ruling is binding on the parties. The arbitrator serves as a final decision-maker whereas a mediator assists the parties in reaching their own resolution to their dispute.
During the hearing, the rules of evidence are slightly more relaxed than they are in a court of law, and the parties have a little more freedom in the manner in which they present their case.
What Kinds of Cases Are Appropriate for Arbitration?
Almost any case may be arbitrated. Many companies are turning to arbitration in an attempt to resolve disputes without the time and expense associated with litigation.
The primary reason to submit a case to an arbitrator is the time and cost savings associated with arbitration as opposed to litigation. Additionally, when a case involves highly complex or technical matters, parties often prefer someone with specialized knowledge to hear their dispute and issue a final decision rather than a judge or a jury who are not likely to be well versed in such matters. Finally, litigation takes time. If this is a concern, it is likely that a case can be submitted to arbitration and a decision issued by the arbitrator much quicker than the same case would be resolved in a court of law.
What Happens At Arbitration?
Generally, an arbitration hearing is much like a trial (without a jury). The parties usually begin by giving opening statements, witnesses are sworn, exhibits are submitted, the attorneys perform direct and cross-examinations and make closing arguments. Because the hearing is conducted by an arbitrator and not a judge, there is a great deal of latitude in terms of the structure of the hearing. There are also cases where an arbitrator will issue a decision based on the evidence submitted by the parties.
Within a reasonable time following the hearing, the arbitrator will issue a final written decision. The parties may request a written explanation of the arbitrator’s decision. The arbitrator’s ruling is final and binding.
What Should You Consider When Choosing an Arbitrator?
Once the parties have agreed to arbitrate their case, the next thing they will need to do is select an arbitrator. Important considerations include whether the selected arbitrator’s schedule will allow the hearing to be conducted with respect to the parties’ time frame; the number of arbitrations conducted by the arbitrator; whether the arbitrator has any judicial experience; the arbitrator’s reputation for fairness and integrity in the area and region; and, whether the arbitrator has any expertise in the area of the parties’ dispute.