Arbitration is a type of alternative dispute resolution (ADR) that individuals can use to resolve a legal dispute outside of a courtroom. An arbitration can be scheduled by the parties involved, ordered by a court, or handled with help from an organization, for example, the American Arbitration Association (AAA).
The process of arbitration is similar to the court process, as a neutral party serves as the arbitrator, similar to the judge. The arbitrator decides the outcome based on the evidence presented by both sides. An arbitrator is not required to be an attorney or a judge.
The process is less formal than handling the case in court but slightly more formal than other types of ADR, such as mediation. The arbitrator often makes a binding decision, unlike mediation, where the parties are encouraged to come to an agreement.
There are, however, two categories of arbitration, binding arbitration and non-binding arbitration. A decision in a binding arbitration is a legal and enforceable outcome made by the arbitrator.
Non-binding arbitration, on the other hand, typically results in a recommendation from the arbitrator that is not legally enforceable. This can allow the parties to obtain an expert opinion on their issue and arguments without being legally bound to the outcome. If a party is not satisfied, they can proceed to a trial.
Usually, an arbitration decision is binding on the parties. However, there is binding arbitration and non-binding arbitration. Decisions in binding arbitrations should be enforceable, whereas non-binding arbitration results in decisions that are not enforceable. The decision that the arbitrator makes is called an arbitration award.
The arbitration process and the arbitrator’s decision are not made public. This is one of the common reasons parties choose this process, as it maintains their privacy. A trial, in contrast, is typically open to the public and becomes part of the public record.
What Is an Arbitration Agreement?
An arbitration agreement is a clause or provision in a contract stating that the parties to the contract agree to resolve their legal disputes using arbitration instead of in court. These clauses are often referred to as arbitration clauses.
Arbitration clauses are typically included in the contract itself. In many contracts, the arbitration clause provides that arbitration is the required method of dispute resolution for the parties that signed the contract.
One common question related to these clauses is whether or not the court will enforce the arbitration clause. It is important to note that, in maritime contracts and contracts that cross state lines, the Federal Arbitration Act (FAA) typically overrules any state laws limiting the enforceability of mandatory arbitration agreements.
If the FAA does not apply to a contract, the law of the state where the arbitration is held controls whether the court will enforce the mandatory arbitration clause. Both federal and state courts should enforce mandatory arbitration agreements when the circumstances indicate that the agreement is enforceable.
The laws that govern arbitration agreement enforcement can vary by state. Ohio allows for the use and enforcement of mandatory arbitration clauses unless a valid reason exists to revoke the contract.
Whether or not a state or federal court will enforce an arbitration clause can be a complicated issue. An Ohio lawyer can help a party understand what type of contract they will be entering into and whether the arbitration clause may be enforceable in state or federal court.
When Will a Court Enforce an Arbitration Decision in Ohio?
Another important issue related to arbitration clauses is whether or not the court will enforce an arbitration decision. In many situations, the parties involved are willing to voluntarily follow the arbitrator’s decision.
The parties involved do not have the authority to force a party to comply with the arbitration award, even when the arbitration is binding. The AAA does not have the authority to enforce an arbitration award in a case handled under its direction, either.
One of the parties involved may win a mandatory arbitration award and the losing party may not comply with the award directions. When this occurs, the winning party can take the award to court to confirm the arbitration award. Under AAA rules, the parties in an AAA case can agree that the arbitration award can be entered as a judgment in any state or federal court that has jurisdiction over the case.
The parties may also agree that any arbitration award will be enforceable by a court of law. Once the award is entered as a judgment, the court will be able to enforce it in the same way as any other type of judgment.
Every state, including Ohio, has its own rules for making a party comply with arbitration awards. As noted above, if the arbitration was non-binding, the award will not be enforceable under the law. Following a non-binding arbitration, the parties can take their issue to court if they want to.
A non-binding arbitration is informal and may not serve any actual goals in the legal sense. For example, the parties involved may just want to air their grievances and get input from a neutral third party about the issues involved.
Binding arbitrations may be more formal and similar to trials in court. For example, with arbitrations, the individual may testify under oath. Additionally, depositions can be formally recorded as evidence.
In some situations, an arbitration may be required by a court, called mandatory arbitration, and the arbitrator may be court sponsored.
In this situation, the parties will be required to participate in the arbitration or they can face consequences for their failure to do so. Additionally, the parties have to respect the arbitration award and they cannot seek a lawsuit to resolve their dispute.
What if an Arbitration Agreement Is Violated in Ohio?
In Ohio, when an arbitration agreement is a contract provision, it is enforceable just like any other contract provision. One of the parties to the contract can go to court to enforce the arbitration provision if the other party will not participate in the arbitration as required or if they breach the arbitration in another way.
When one party refuses to participate in the arbitration and files a lawsuit against the other party instead, the party that is sued can use the arbitration agreement as a defense to the lawsuit. A violation of a mandatory arbitration agreement can also result in legal penalties.
For example, when a party refuses to participate in mandatory arbitration, they may be subject to a contempt order or an injunction. The party may also be ordered to pay monetary damages for a breach of contract. To find out more about consequences for arbitration agreements, it is important to schedule an Ohio lawyer consultation.
Do I Need the Help of a Lawyer for My Arbitration Issue in Ohio?
If you have any issues, questions, or concerns related to an arbitration clause, it is important to reach out to an Ohio business lawyer for advice and assistance. Although the arbitration process may appear less formal than a trial in court, having an attorney will provide you with the greatest chance of success.
You can take advantage of LegalMatch’s no cost attorney matching services to find an Ohio business attorney in your area who can answer your questions and help resolve your issue. LegalMatch will connect you with available licensed and prescreened lawyers in your area of Ohio who can help.
