Arbitration is a form of dispute resolution that people can use to resolve legal disputes or issues outside of court. It is a type of alternative dispute resolution (ADR). ADR can also include mediation, negotiation, and settlement conferences.
An arbitration may be ordered by the court, scheduled by the parties, or required by a contract that the parties signed. There are also organizations that can help, such as the American Arbitration Association (AAA).
The arbitration process is similar to a trial, but is slightly more relaxed in nature. An arbitrator, a neutral third party, listens to the arguments and evidence of both sides and issues a decision. Arbitrators do not have to be judges or lawyers.
The arbitration process is not as formal as a court trial but is more formal than other kinds of ADR, including mediation. In arbitration, the arbitrator typically makes a decision that is binding. This is different from mediation, where the parties involved are encouraged by a third party to reach an agreement.
There are two main categories of arbitration, which includes binding arbitration and non-binding arbitration. Decisions in binding arbitration cases are legal and enforceable outcomes that are made by the arbitrator.
With a non-binding arbitration, the arbitrator usually provides a recommendation from an arbitrator that will not be legally enforceable. This process can let the parties get an expert opinion on their issues and arguments without having to be bound to the outcome. When a party involved is not happy with the outcome, they can take their claim to trial.
The decision that is made by an arbitrator is referred to as an arbitration award. The process of arbitration, as well as the decision that an arbitrator makes, is not public record.
This privacy is one of the most common reasons that parties choose the process. In contrast, a trial and its evidence and arguments are usually open to the public and will become part of the public record.
What Is an Arbitration Agreement?
Arbitration agreements are provisions or clauses in contracts that provide that the parties to a contract agree to resolve any disputes related to the contract in arbitration instead of in a courtroom. These may also be referred to as arbitration clauses.
Usually, arbitration clauses are in the contract documents. Many contracts contain the clauses that state that the required way to resolve any disputes between the parties to the contract is by using arbitration.
A common question that arises regarding arbitration clauses is whether or not a court will enforce them. It is important to be aware that, in a contract that crosses state lines or a maritime contract, the Federal Arbitration Act (FAA) will usually overrule any state laws that limit the enforceability of mandatory arbitration agreements.
When the FAA does not apply to the contract, the laws of the state where arbitration is held will control whether or not the court enforces a mandatory arbitration clause. State and federal courts should enforce a mandatory arbitration agreement if the circumstances indicate that the agreement is enforceable.
The laws governing arbitration agreement enforcement can be different in every state. In Pennsylvania, mandatory arbitration agreements are typically enforceable, so long as the agreement is in writing and valid under contract law.
Pennsylvania lawyers can help their clients understand the type of contract they are considering entering into, as well as whether the arbitration clause it contains is likely to be enforced in federal or state court.
When Will a Court Enforce an Arbitration Decision in Pennsylvania?
Whether or not a court will enforce a Pennsylvania arbitration decision is an important issue. In most cases, the parties who are involved in the arbitration are willing to follow the arbitrator’s decision voluntarily.
The parties to an arbitration do not have the authority to force another party to comply with the arbitration award, even when it is binding. If a party wins a mandatory arbitration award, the party who loses may not want to comply.
If this happens, the winning party can request that a court confirm an arbitration award. If the case was handled by the AAA, the parties involved can agree that the arbitration award may be entered as a judgment in federal or state court with jurisdiction over the case.
The parties to the arbitration may also agree that the award will be enforceable in court. Once an arbitration award is entered as a judgment by a court, it can be enforced in the same manner as other types of judgments.
All states, including Pennsylvania, have their own rules for making a party comply with an arbitration award. If the arbitration was not binding, an award will not be enforceable under the law. After a non-binding arbitration, the parties are allowed to take their dispute to court if they wish.
Non-binding arbitrations are not formal and, in the legal sense, may not serve any goals. The parties involved, for example, may simply want to air their grievances and obtain input from a neutral third party about their issues.
A binding arbitration, on the other hand, can be more formal and more similar to a trial held in a courtroom. In arbitrations, parties can testify under oath and depositions can be formally recorded as evidence.
If an arbitration is ordered by a court, referred to as mandatory arbitration, the arbitrator may be sponsored by that court. In this situation, the parties have to participate in the arbitration or they may face legal consequences. In addition, they will have to respect the arbitration award and will not be able to file a lawsuit to resolve their dispute.
What if an Arbitration Agreement Is Violated in Pennsylvania?
When an arbitration agreement is violated in the State of Pennsylvania, a party may be able to file a lawsuit, especially when a party fails to follow the procedures of the agreement. A violation may also arise if an agreement is found to be unenforceable, due to unconscionability or because it is incomplete.
Depending on the violation, the court may either allow the parties to follow the arbitration process or let the case proceed to court. If, for example, a party will not participate in an ordered mandatory arbitration, they can be subject to an injunction or a contempt order.
A party can also be required to pay monetary damages for breach of contract. For more information on the consequences of arbitration agreement violations, it is essential to have a Pennsylvania lawyer consultation.
Do I Need the Help of a Lawyer for My Arbitration Issue in Pennsylvania?
It can be very challenging to enforce an arbitration agreement in Pennsylvania without help from a Pennsylvania business lawyer. Even though arbitration may appear less formal than a trial, having a lawyer from the start will help ensure a successful outcome.
LegalMatch lawyers can help you enforce your arbitration agreement or award in Pennsylvania. If you are considering signing a contract that contains an arbitration agreement, your lawyer can review the contract and help ensure disputes do not arise.
It will only take you around 15 minutes to complete the online submission process and be connected to Pennsylvania business attorneys near you who can help with any arbitration question or concern you may have.
