What is Arbitration?
Arbitration is a method of dispute resolution. The goal is to reach a fair resolution to a legal dispute without going to court and without undue cost or delay. Arbitrators are usually appointed in one of three ways: an agreement between disputing parties, a tribunal, or a third party. Arbitration can be classified in several ways.
The goal of arbitration is to reach a fair resolution for a legal dispute without going to court and without undue cost or delay.
Commercial disputes occur between commercial enterprises and are usually related to contracts or transactions. This is the most common classification of arbitration. Consumer disputes involve arbitration between consumers and businesses. Disputes between employees and employers are categorized as labor arbitration can be divided into two subcategories: rights arbitration and interest Arbitration. Rights arbitration involves an allegation that an existing collective agreement has been either violated or misinterpreted. Interest arbitration, also referred to as grievance arbitration, involves issues between an employer and employees not resolved in bargaining.
The Arbitration Process
While each case is unique, a number of common steps usually take place in the arbitration process:
- Initiation and Appointment– One party will request arbitration. Both parties must agree to undergo this process. Next, an arbitrator will be appointed.
- Preliminary Meeting – Once an arbitrator has been appointed, they will usually meet with both parties to review the details of the dispute, outline the process, and establish a timeframe for completion.
- Statement of Claim and Response – The party making the claim will identify and summarize all issues and the respondent will admit or deny each one.
- Discovery and Inspection – Both parties will list relevant documents (discovery) and review them (inspection).
- Evidence – Prior to the hearing, the arbitrator will be given written evidence by both sides.
- Hearing – Both parties will orally present their version of the facts. This may involve an opening and closing statement, witness testimony, and cross-examination. Hearings can be located anywhere, taking into account neutrality, cost, and other factors.
- Decision – The arbitrator will submit a decision. It will typically include a summary of the hearing, who won, and how much money is due.
Differences Between Arbitration and Litigation
Arbitration and litigation differ from one another in a number of ways.
Arbitration can take place anywhere. Typically, both parties will agree on a location taking into consideration cost and convenience, among other factors. Litigation, on the other hand, takes place in a courtroom in front of a judge and jury.
Arbitrators can be jointly selected by both parties. In litigation, a judge is appointed and neither party typically has a say in the selection.
Unless one party can provide proof that an arbitrator was biased, there is normally no possibility of appealing a decision. In litigation, appeals are much more common.
Arbitration takes place privately whereas litigation occurs in a public courtroom.
Advantages of Arbitration
Arbitration offers many advantages when compared to litigation. These include:
- Speed – Litigation can take months, if not years. The arbitration process, on the other hand, is much shorter. Once both parties agree on an arbitrator, the case can be heard right away.
- Agreement – Because both sides agree on who will arbitrate, each side should feel confident that the issue will be resolved fairly and without bias.
- Confidentiality – Civil litigation takes place in a public courtroom, whereas arbitration can be kept private and confidential.
- Cost – More often than not, the arbitration process will cost less than litigation. The sheer length of trials alone can result in substantial costs.
Learn Whether Arbitration Is Right for You
If you are looking to settle a legal dispute quickly and privately, arbitration may be right for you. Visit us online or call us at (732) 238-8700 to set up an appointment with the team at Law Offices of Jeffrey W. Goldblatt Esq.