What is Arbitration?

Arbitration is one of several alternative dispute resolution options available to you when you have a disagreement and do not want to end up in court.

People involved in a dispute may agree to have a neutral third party decide the outcome of their dispute.  This neutral third party is the “arbitrator”.  People may also agree to have the arbitration be either “binding” or “nonbinding”.  If you agree to binding arbitration, you waive your right to a trial and the arbitrator’s decision is final.  If you agree to nonbinding arbitration, you may choose not to accept the arbitrator’s decision and take the matter to trial.

Once everyone agrees on the arbitrator, the parties may agree on the details of arbitration process such as who will be present at the hearing and how evidence may be put in front of the arbitrator.  Some arbitration hearings are quite informal and some closely follow the court process.  In all arbitration hearings, the arbitrator hears all the arguments and considers the evidence presented.  The arbitrator then decides the outcome of the dispute.

There are several advantages to using arbitration rather than the court process.  First, you may save a significant amount of time and money.  Second, you have a say in choosing who will decide your dispute and you may shop for an arbitrator with special knowledge about the subject of the dispute.  Third, there is more privacy in the arbitration process whereas the court process is often open to the public.  Fourth, if the arbitration is binding, there is finality to the dispute as there are very limited avenues for appeal of an arbitration decision.  Fifth, if the arbitration is nonbinding, the arbitrator’s decision may assist you to assess the strengths and weaknesses of each side’s position.

If you have a dispute but want to avoid ending up in court, you should consider arbitration as an alternative dispute resolution process.  Our lawyers would be happy to assist you in determining whether arbitration is a good option for you.