ARBITRATION
Arbitration is the form of Alternative Dispute Resolution that is most like a court trial. Although arbitration is less formal, less time-intensive, and less costly than litigating a case in court, it is still more formal than other forms of ADR.
In arbitration, a neutral third party—the arbitrator—hears the case in a proceeding called arbitration, which is like a less formal version of a trial. However, rather than working to bring the parties to an agreement, as would be done in mediation, the arbitrator will decide the case as a judge would do at trial, after the arguments are presented.
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Although arbitrators are generally required to follow the law, it remains a fact that arbitrators have been known to interpret legal requirements, and even the rules of arbitration, far less stringently than a court would. This creates even more uncertainty in arbitration than there is at trial. For this reason, choosing carefully when selecting an arbitrator is a necessity.
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Arbitration is typically mandatory, either through an arbitration clause in a contract, or through state or federal law. However, arbitration can also be voluntarily entered into as a less costly and time-consuming method of litigating a case. If the arbitration is mandatory, the arbitration rules are typically designated within the arbitration clause in a contract. In voluntary arbitration, the parties may choose which set of arbitration rules will govern the arbitration proceeding.
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Arbitration is often binding on the parties. “Binding” means that the parties are legally “bound” by the arbitrator’s decision, even if they disagree with it. Although a decision reached in binding arbitration can be appealed, the grounds for appeal are very narrow, and consequently, most binding arbitration decisions are never appealed.
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However, arbitration may sometimes be designated as non-binding arbitration, which means that the parties are not required to accept the arbitrator’s decision if they disagree with it. As a form of case appraisal, non-binding arbitration is useful to parties who want to evaluate the strengths and weaknesses of their case before deciding whether to proceed to trial, or to reach a settlement.
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The Business Litigation team at Nichani Law Firm has extensive experience in representing businesses in
Alternative Dispute Resolution, including arbitration. When Nichani Law Firm is representing your
company, we will always provide the powerful, effective advocacy necessary to meet your objectives.