What is Arbitration? Why am I here?

Arbitration is a form of alternative dispute resolution (ADR) that offers a private and efficient way to resolve disputes outside the courtroom. Instead of going through lengthy court processes, parties agree to have their case decided by one or more arbitrators, whose decision—referred to as the "award"—is typically binding.

How Arbitration Works

Arbitration usually arises in one of two ways:

• Contractual Arbitration Clause: Most commonly, arbitration is required because of a clause in a contract that stipulates disputes must be settled through arbitration instead of litigation.
• Post-Dispute Agreement: Parties can also agree to arbitration after a dispute has arisen, even without a pre-existing arbitration agreement. This makes it important to review contracts closely to understand how disputes will be resolved.

Major Arbitration Providers

Several organizations provide arbitration services, each with its own rules and procedures. The two most prominent in the U.S. are:

• American Arbitration Association (AAA)
• Judicial Arbitration and Mediation Services (JAMS)

These organizations, along with others, help facilitate arbitration, offering experienced arbitrators to resolve various types of disputes.

Benefits of Arbitration

Arbitration has several advantages over traditional court litigation:

• Speed: Arbitration is typically faster than court cases.
• Confidentiality: Arbitration is private, unlike court proceedings, which are public records.
• Flexibility: Parties have more control over the process, such as selecting the arbitrator and setting procedural rules.
• Expertise: Arbitrators often have specific expertise in the subject matter of the dispute, leading to more informed decisions.

Potential Drawbacks of Arbitration

Despite its advantages, arbitration has some limitations:

• Limited Discovery: The discovery process is usually more restricted than in court.
• Costs: Parties must bear the cost of the arbitrator in addition to their own legal fees.
• Limited Appeals: Arbitration awards are difficult to appeal, even if the arbitrator makes a legal error.
• No Legal Precedent: Arbitration decisions do not establish legal precedents, which can lead to inconsistent outcomes in similar cases.

Choosing an Arbitrator

Arbitrators act as private judges, often selected from a pool of experienced retired judges or attorneys. Parties can usually choose the arbitrator or narrow down the selection from a list provided by the arbitration service. If the parties can't agree, the arbitration provider will select one. Once chosen, the arbitrator oversees the process, makes rulings, and ultimately decides the case.

Conclusion

Arbitration offers an alternative to traditional court litigation, with benefits like speed, privacy, and flexibility. However, it's essential to understand the arbitration process fully, particularly when agreeing to arbitration clauses in contracts. If you're in arbitration, carefully select an experienced arbitrator and understand the rules governing your case to achieve the best outcome.