Arbitration is a form of alternative dispute resolution. It offers parties the ability to formal resolve disputes outside of the court systems in a way that is final and legally binding. The authority of the court system is based on the authority of government, whereas the authority Courts get their authority from government, their ability to make rulings and have those rulings followed flows directly from their power as government actors. Arbitration on the other hand is not related to the court system or to government, instead its authority flows from agreement. Arbitration can be legally binding and decisions or arbitrators upheld by and through the agreement of parties. Many contracts contain provisions requiring that parties resolve any disputes that may arise through Arbitration as opposed to litigation. These contractual provisions grant arbitrators the authority to resolve disputes.
Arbitration is generally seen as a quicker and more economical alternative to litigation. Matters that proceed via arbitration are usually resolved more quickly than they otherwise would be had they traveled through the court system. For this reason, many believe that arbitration is cheaper than litigation. However, keep in mind that the parties to an arbitration must pay the arbitrator for his or her time expended on a case. Arbitration functions similarly to litigation in many respects. There are feuding parties, and attorney on each side. Each side gets the opportunity to depose witnesses, conduct discovery and make arguments at hearings, just as in litigation. However, in arbitration, there is no jury. The arbitrator, or sometimes a panel of multiple arbitrators, will resolve all disputes.
Arbitration is generally deemed to be less rigid or formal than litigation. Arbitrators have more leeway when making their rulings, and are not bound by prior court precedent as judges may be. There are different organizations that govern arbitration, such as the American Arbitration Association (AAA). These organizations publish rules that guide arbitrations, similar to rules of civil procedure in litigation. These governing rules are usually less extensive then rules governing court producers, but do offer a basic roadmap for arbitration participants. Although sometimes arbitration can be non-binding, Arbitration awards are generally binding on parties and will usually be upheld if challenged in a court of law.
It is important to understand the benefits and potential shortcomings of arbitration prior to agreeing to it. An experienced attorney can help guide you through the process and advocate for you every step of the way. The Law Office of Robert N. Pelier, P.A. has experience in both litigation and arbitration and can help you navigate your legal disputes.