Arbitration is a form of alternative and private dispute resolution, a way to resolve disputes outside of the public court system. Arbitration is often a “creature of contract,” as arbitration clauses – clauses in contracts providing that disputes between the contracting parties be resolved through arbitration – are becoming increasingly common.
What is Arbitration?
Arbitration is a private – and, mostly, binding – process of resolving disputes outside of the court system.
The dispute is decided by one or more impartial adjudicators (known as “arbitrators,” “neutrals,” the “arbitral tribunal” or simply the “tribunal” or “panel”) which render an “arbitration award.” Such an award is final and legally binding on both sides, and enforceable in the courts, as there are very limited rights of review and appeal of arbitration awards.
There are several organizations that offer arbitration services, the most well-known being the American Arbitration Association (the “AAA”), JAMS, and the International Chamber of Commerce (“ICC”). There are also industry-specific organizations that offer arbitration services such as the Financial Industry Regulatory Authority (“FINRA”) and Independent Film and Television Alliance (“IFTA”).
Each organization has its own rules and procedures, and some even have different rules and procedures depending on the subject matter of the dispute.
The Pros and Cons
Like most things in life, arbitration has its pros and cons. Some of the potential positive aspects include: the parties’ ability to “choose their judge” (as most arbitration processes allow the parties to jointly select or vote on their choices for a neutral arbitrator); the process is typically less costly and shorter in duration than contested litigation; and the proceedings are private as opposed to public.
Some of the potential negative aspects include: the parties’ waive their right to a jury trial, the parties’ waive their rights to a public trial which may otherwise discourage future wrongdoing by a culpable party, the limited discovery (information exchange) devices available in arbitration, and the very limited avenues for appeal.
Our experienced attorneys can represent you in arbitration with the hopes of avoiding the time, expense, and publicity of litigation.
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