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Arbitration: An Alternative To Going To Court

Arbitration: An Alternative To Going To CourtMany of us have heard the term “arbitration” before but are not exactly sure just what it means. We see it all the time in employment contracts, credit card agreements, and retail contracts, to name a few. Since you may have seen a mandatory arbitration clause in a contract that is good to know just how it works.

Arbitration Versus Litigation

Litigation is the process of going to court to settle a dispute. Arbitration is an alternative method of resolution that takes place instead of going to court in the hopes of settling a dispute without the costs and time involved in a lengthy court case. The primary difference between the two involves the process itself. While both are a formal process arbitration is usually less costly and takes less time to settle. According to the American Arbitration Association, the average time for arbitration is between 15 to 16 months whereas litigation takes an average of 24 months. In arbitration the dispute is brought before a disinterested third party and can be done internally, or with the support of an organization like the AAA.

The Arbitration Process

The first step in arbitration is for the parties to select an arbitrator. This can be an attorney, an expert in the field or a relevant organization. An arbitration hearing is very similar to a trial in that the arbitrator listens to the evidence that each side presents and then an opinion is given. Unlike trial judgements, opinions are not listed in public record.

Arbitration Versus Mediation

Mediation and arbitration are often confused with each other, so it is important to understand the difference. Mediation is an informal process where the two sides bring in a third party who goes back and forth between the two parties to come to a mutually agreed upon settlement. Mediation is a voluntary process and is not binding to either party. In mediation the mediator meets with each party and discusses the issue called caucusing (a separate discussion). While they work with both sides, they cannot impose a settlement. Usually found as a clause in contracts, arbitration begins when two parties agree to settle their dispute through arbitration. If you have signed an arbitration clause in a contract then it is your only option. It begins when one party submits a “Demand for Arbitration” to the AAA. The responding party is notified and following process occurs:

• Selection of an Arbitrator: Both parties work with the AAA and select an arbitrator based on the criteria requested by both parties.

• Preliminary Hearing: The arbitrator discusses with both parties the issues of the case, sharing information, interviewing witnesses, reviewing depositions and other pertinent information.

• Exchange of Information: Both parties prepare for presentations and exchange information.

Hearing: The arbitrator then conducts a preliminary hearing and the issues in the case and procedural matters are shared with the two parties involved. In most cases there is only one hearing, but if the matter is complicated, it can be more.

Post Hearing: Both parties are allowed to present any additional information and documentation to the arbitrator.

Award: The arbitrator then issues a decision, closed the record on the case and determines an award, if applicable.

Will I Need a Lawyer for Arbitration?

You most certainly can represent yourself on your own behalf (called “pro self”) and the business can arbitrate “pro se” which means someone in the company represents that side. You can be certain if it is a large company will not be a co-worker but someone that the corporation specifically trained to win at arbitration. Since arbitration is final, legally-binding process and will affect your rights, you definitely do not want to try and do this on your own.

If you are considering arbitration instead of litigation for your personal injury case, the St. Pete Lawyer Michael Babboni help. He’ll review the contract, determine your options, and represent you to ensure that you do not get railroaded by the other party. Contact us today and see how we can help you.

Michael J Babboni