WHAT IS ARBITRATION?
Arbitration is a method of resolving disputes between two or more parties. Just as differences may be concluded by negotiation, mediation or ligation, so may they be resolved through arbitration.
In an arbitration, a neutral person who is uninvolved in the dispute (the arbitrator) listens to the parties express their views and then renders the decision (an award) based upon the presentation of evidence.
The process is similar to what takes place in a court of law. Any party may be represented by an attorney. Formal rules of evidence are not required and the dispute will not be decided by an active judge or jury. Nevertheless, the award issued by the arbitrator may be binding upon the participants and can be enforced as if it were rendered in a court.
WHAT ARE SOME ADVANTAGES OF ARBITRATION?
When disputes are finalized through arbitration, resort to the judicial system is avoided. Courts are backlogged. Cases move slowly, the formal rules are cumbersome, and a trial may not take place for many months or even years. The delays inherent in litigation create an emotional and financial hardship on all parties.
An arbitration will almost always be concluded sooner than a court action. The entire process from start to finish may be completed in a few months. Because of the speed and informality, attorney fees and costs are usually lower than in litigation.
Arbitrations are not open to the public. The testimony and any sensitive information is private. Individual arbitrators can be selected with expertise in the particular field of dispute. This helps to ensure that the decision will be made by a knowledgeable and informed person. Lastly, arbitration awards may be final and legally enforceable.
WHAT ISSUES CAN BE RESOLVED BY ARBITRATION?
Arbitration may be used to decide virtually any type of claim which the parties agree to submit. Certain types of claims may be excluded by statute from arbitration under a real estate listing or sales agreement. Examples include bodily injury, wrongful death, foreclosure, marital dissolution, probate or eviction proceedings. Other limitations may appear in the arbitration clause itself. As a remedy, the arbitrator may award money damages as well as order specific performance.
WHY ARBITRATE?
• Fast
• Informal
• Private
• Cost-Effective
• Final