Arbitration is a type of alternative dispute resolution (ADR). Basically, it’s an alternative to settle a dispute outside of the court system. Many people confuse mediation and arbitration (or think they’re the same thing). While there are many similarities, the main difference you need to know for now is that in mediation, even if the mediator suggests a solution, the parties aren’t bound to accept it.
The decision of the arbitrator, however, is typically binding on both parties. Arbitration is most common in commercial and employment disputes. For instance, the contract you sign with your car dealer or your employer may contain an arbitration clause. It may also be mandated by state law in some circumstances. However, you can also enter into arbitration voluntarily.
Much like a personal injury case that goes to court, you should have an attorney present. They’ll be able to protect your rights and advise you about proper procedures.
Why Would I Want Arbitration?
There are several advantages of arbitration over court proceedings. First and foremost, in the United States, arbitration awards are just as enforceable as court decisions.
Moreover, it’s sometimes faster, less expensive and more flexible than litigation. You can also often have an expert appointed to arbitrate (whereas in the court system you get the judge you’re given), which is a big help if the details of your case are highly technical (for instance, in a medical dispute).
Additionally, because of an agreement signed by the United Nations, arbitration settlements are usually easier to enforce internationally. A bi-lingual arbitrator can even be appointed to ensure neither party is affected by a language barrier, which isn’t always possible in the U.S. court system.
Why Would Anyone Choose the Courts, Then?
Arbitration is pretty complex. Just because you aren’t in a courtroom doesn’t mean there aren’t legal processes at work. Additionally, plaintiffs who hire less experienced attorneys (or worse, no attorney at all) may find themselves at odds with a powerful lawyer when dealing with a company or corporation with more financial resources.
Also, since there’s rarely an appeals process in arbitration and the decisions are usually binding, there’s no recourse if you believe the decision was unfair or if new information comes to light afterward.
Depending on the terms of the arbitration agreement or clause, it can actually get pretty pricey if you have to pay your attorney and the arbitrator; and if a group of arbitrators are appointed, it may take just as long as litigation trying to work around everyone’s schedules. While it usually isn’t the case, there are arbitration agreements that prevent you from seeking attorney fees as part of your damages.
How Do I Know What to Do?
Arbitration agreements and clauses are one of the many reasons you should never sign a contract without reading it first. If you don’t know arbitration is required, you could waste precious time and money launching a lawsuit you’ll have to drop when the opposing counsel points out the arbitration clause.
Either way, the first step you should take is to call an experienced law firm like Charles A. Gilman LLC for advice. We can help you decide whether arbitration is right for you (if it’s optional) and advise you on how best to proceed if it isn’t. We’ll also be with you every step of the way, so you’ll never be railroaded by someone who’s more experienced.
If you’re considering arbitration or if you’re bound to it by a contract you signed, call the law offices of Charles A. Gilman LLC at 866.676.7374 for a free consultation.
