What is Arbitration?
Arbitration is a dispute resolution process in which a neutral person who is not part of the conflict decides how the parties differences will be resolved.
Arbitration is different from negotiation and mediation in many ways. The most important difference is that in arbitration, instead of the parties to the dispute reaching their own agreement as to how their issues will be resolved, a neutral third party (the arbitrator) makes the decision for you and the other side.
The process of arbitration has some things in common with a trial. The first similarity is that the parties are relying on a fair third party to make a decision for them. Second, the arbitration process has rules that need to be followed to ensure that the proceedings are fair and legal. These rules apply to the parties, their lawyers (if the parties have lawyers) and the arbitrator.
The arbitrator, like a judge in our court system, is presented with evidence from both sides (documents and witnesses). Once sufficient evidence has been presented, the arbitrator then makes a decision that is binding on the parties. Binding means that the parties must comply with the decision. The decision of an arbitrator is enforceable under the law.
Unlike trials, the parties choose who will judge their case, that is you choose your arbitrator. The arbitrator is a private judge . For this reason, most arbitrators are lawyers or retired judges, although there are also other professionals who have specialized training.
The proceedings in an arbitration are usually voluntary, and are always confidential.
why would you choose arbitration instead of going to trial?
Some of the reasons include: (1) it is a way to expedite resolution (trial courts often have long lists of cases that can result in lengthy delays before matters can be resolved); (2) arbitrations can be scheduled to suit the parties availability; (3) the proceedings are less formal, often allowing the parties the ability to more directly participate in a way that trials usually do not – parties should be heard, this process allows for that; and (4) in many cases arbitration is less adversarial than the trial process and therefore causes less damage to relationships, this means the parties are more likely to be able to continue their relationships.
WHY WOULD YOU CHOOSE ARBITRATION instead of negotiation or mediation?
Parties are encouraged to attempt negotiation and/or mediation prior to attempting arbitration. However, in those cases where the parties have tried these other routes of resolution and are still not able to reach an agreement, arbitration is often the next best alternative.
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