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What Is Arbitration?
Arbitration is commonly known as Alternative Dispute Resolution (ADR). It's a process where both sides come together and agree to follow and respect the decision of the arbitrator. The arbitrator is usually an attorney familiar with the field of law being decided. The decision of the arbitrator is legally binding against both parties.
Why Enter into Arbitration?
There are several reasons why choosing to work with arbitration lawyers is a better course of action than filing a lawsuit. These include:
- Arbitration is less expensive in comparison to litigation. Litigation can be a long, drawn out process that can take years to decide. In comparison, arbitration is much faster and more efficient.
- Hiring arbitration lawyers saves money for litigation and legal fees.
- Prevents an opposing party from suing while in arbitration. Most courts will not allow a lawsuit to continue when both parties are in arbitration.
How Can I Know whether Arbitration Is Right for My Case?
There are various considerations a person must consider when deciding between arbitration and court. These include:
- Ask a lawyer - An experienced arbitration lawyer can advise you on the strength and characteristics of your case. Then you will be able to make an informed decision on whether arbitration is a better forum for your case.
- Decide how long you want this issue to continue. In most cases, parties want their disputes resolved quickly and efficiently. A party should consider their needs and make a decision.
- Financial considerations.
- Specialized disputes - Some parties may desire a decision maker who is an expert in a field other than law. Unlike judges, arbitrators can come from non-legal backgrounds, including: medicine, engineering, and religion.
Can I Appeal an Arbitration Award?
It depends on the agreement of the parties. In most cases, an arbitration decision is final and binds both parties by its decision. In very limited cases, however, you can appeal an arbitration award in court. Courts may or may not review an arbitration award. When a court reviews a decision made by an arbitrator, the court will either enforce the arbitration award or vacate the award. Courts may review a private arbitration based on two governing sources:
- Federal Arbitration Act - First, the Federal Arbitration Act gives a basis for judicial review of an arbitration award. Courts review arbitration awards limited to “egregious departures from the parties’ agreed-upon arbitration.” A court may vacate an award where the award is a product of fraud, corruption, or serious misconduct by an arbitrator. If none of these requirements are met, the court must confirm the arbitration award.
- Public Policy- Second, courts may vacate the arbitration awards if the arbitration award is against public policy. Courts are split. Some courts hold that child custody and visitation rights in domestic disputes are not subject to arbitration on public policy grounds. Other courts confirm arbitration awards if the substance of the particular award reflects the current public policy on the subject.
In any case, these grounds are narrow grounds. Many cases fail to meet statutory requirements. As a result, courts rarely review the arbitration award, and even if so, rarely overturn arbitration awards. In addition, courts are often reluctant to overturn arbitrator awards because doing so can reduce the usefulness of arbitration as an alternative dispute resolution (ADR) mechanism.
Should I Consult an Attorney?
The decision whether to enter into arbitration or litigation is an important one. There are many factors to consider and an attorney can advise you on your decision. An attorney can consider your case and help you determine whether arbitration is right for you. Furthermore, an attorney can help you decide what arbitrator would be the best fit in your situation.
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Last Modified: 01-06-2016 11:01 AM PST
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