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Arbitration
Arbitration is a method of alternative dispute resolution in which the disputing parties agree to submit their
dispute to an impartial third person or persons - called the arbitrator(s).
There are different types of arbitration. Binding arbitration is where an arbitrator
has the power to impose a decision on the parties. In non-binding arbitration,
the arbitrator can recommend but not impose a decision.
 Typically, the arbitrator or arbitrators are selected directly by the parties or are
chosen in accordance with the terms of a contract in which the parties have agreed
to and signed. Many types of contracts, such as commercial contracts and employment
agreements, require mandatory arbitration in the event of a dispute. If there is no
contract, usually each party will be allowed to choose an arbitrator and the two
arbitrators will select a third. More info is available from the American Arbitration Association.
Arbitration uses rules of evidence and procedure that are less formal than those followed
in trial courts. This usually leads to a faster, less-expensive resolution of the dispute.
Some of the other advantages of arbitration are:
- Arbitration is usually much less expensive than litigation. The American Arbitration Association, for example, charges on a sliding scale, based on the amount of the claim.
- Arbitration decisions are usually delivered much quicker then a judgment from a court. You can expect to receive an arbitrator's decision within six months after the demand for arbitration is submitted. Lawsuits can take over a year to be decided and often run much longer if there are appeals.
- Unlike a trial, arbitration proceedings are private. There's no need for your competitors or the general public to know your business.
- In theory, arbitration often avoids the bitter acrimony that can affect the parties in a lawsuit. It's not unusual for parties to resume their normal business relationship after their dispute has been arbitrated.
Arbitration Links
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