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People's Law Guide

 

Arbitration - What's It All About?

05/09/11

Arbitration - What's It All About?
By Stephen M. Feidelman, Esq. © 2011

Do you need to know what arbitration is all about? Here are the basics.

What is arbitration?

Arbitration is a private method of resolving legal disputes, and its results are usually kept confidential. It is said to be strictly a matter of contract or may be submitted to voluntarily by all parties. However, one cannot usually force another into the arbitration of a claim made against her if she has not agreed to arbitrate that claim. Arbitration uses paid case managers and arbitrators in place of the civil court clerks and judges. Some arbitration agreements may require the use of three or more arbitration panel members.

Who pays the expense of arbitration?

Except in the instance of some specific types of consumer law cases, the person bringing the claim is often required to advance the full amount of all arbitration filing and case management fees. The parties are also usually expected to equally share and advance the costs of compensating the arbitrators. The prevailing party may be awarded its arbitration costs and reasonable attorneys fees if that remedy is provided for by the underlying contract or statute sued upon. Like in civil court, this may or may not result in full reimbursement.

Who runs the arbitration?

There are several nationally and internationally recognized private arbitration services which can be chosen to act as a case manager, provide a roster of "neutrals" from which the arbitrator is chosen, accept the filing of papers for transmission to the arbitrator, collect all applicable fee and arbitrator compensation payments, and maintain rules governing the arbitration process. In addition, some civil court systems have implemented various forms of arbitration procedures annexed to existing civil court cases.

What are the arbitration proceedings really like?

There will usually be a preliminary conference with the arbitrator and all parties to identify any procedural issues which need to be resolved and discuss how to deal with them, schedule the various procedural deadlines in the case, and to set a trial date. In arbitration, the trial is called the "final hearing". This is often done telephonically. Although arbitration proceedings are conducted with less formal rules and proceedings than in civil court, it would be a mistake for any party to take the process lightly. It is common to see experienced lawyers representing the parties in arbitration cases just as they would in civil court. Arbitration is typically less permissive about the extent of information which may be requested from the opposing party but more permissive about the evidence which will be considered at the final hearing than a civil court would normally permit. There is no jury. The arbitrator serves the functions of both the judge and the jury. So, always remember to be respectful to your arbitrator.

What if I don't like the arbitration results?

Arbitration results (called an "award") are intended to be final and therefore are difficult to overturn. The award may be reviewed through an appeal to a civil court, but only upon very limited statutory grounds. Therefore, many perceived errors made by an arbitrator may be expected to be upheld on appeal - even where it appears the law was incorrectly applied to the facts. This is a good reason to respect the entire arbitration process and take it seriously!

Additional Resources

You can find additional information about arbitration at the links below and at other web sites or you can consult a licensed attorney in your state

American Arbitration Association (AAA)

Judicial Arbitration and Mediation Service (JAMS)

Stephen M. Feidelman maintains a general civil law practice in Hollywood, Florida, with a core concentration on franchise and dealership representation and allied business law issues. He has attained a Martindale-Hubbell Peer Review rating of AV7 Preeminent™ - 5.0 out of 5, which depicts that a lawyer is recognized for the highest levels of skill and integrity; has served on the Executive Council of The Florida Bar Business Law Section; chaired The Florida Bar's Antitrust, Franchise and Trade Regulation Law Committee; been a faculty participant in numerous seminars related to franchise and business opportunity legal issues; contributed to Florida Bar committee consumer education pamphlets and seminar course materials; and been a guest college lecturer on franchise law issues.

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