General Overview/What It Is:

Arbitration is a standard form of alternative dispute resolution (“ADR”) wherein an independent third party (the “arbitrator”) makes a private determination over a dispute between parties (sometimes referred to as the “arbitration reward/decision”) upon the conclusion of an arbitration hearing. In contrast to mediation which is advisory in nature, arbitration has an adjudicatory function, and, upon prior agreement of the parties involved, the arbitration decision rendered can be final / binding / enforceable, subject only to limited judicial/court review.

Why Arbitration?/Advantages of Arbitration:

Arbitration may be an appealing and attractive option method of dispute resolution to parties who seek to privately resolve business/commercial disputes outside of court. Arbitration offers a number of advantages over traditional judicial proceedings. Some of the more common advantages include the following:

You Chose Your Decision Maker

In contrast to litigation where parties cannot choose what judge will preside over your case, arbitration allows parties to choose their own independent third party/tribunal to hear and decide on the case. This is especially beneficial when the subject matter of the dispute is especially technical or highly specialized, as the parties can choose an arbitrator(s) with an appropriate degree of expertise.

Efficiency of the Process

The arbitration process, from beginning to end, is generally much faster than typical litigation in court. This efficiency is simple to explain: court proceedings occur before judges with very busy docket schedules and very limited availability, whereas the retention of a private arbitrator can more readily accommodate a more expedient process to bring finality to your dispute.

Privacy and Confidentiality

In contrast to court proceedings, arbitration hearings, meetings and decisions are non-public and can remain confidential.

Convenience

Arbitration hearings are arranged at times and places to suit the parties, arbitrators and witnesses, whereas parties have very limited control on when their case will reach a courtroom in general court litigation.

Flexibility

The procedures can be segmented, streamlined or simplified, according to the circumstances and the desires of the parties.

Finality

The parties can agree that the arbitration decision will be final. If they do, there are very limited avenues to appeal, which brings faster closure to your dispute. This may be beneficial as it limits the duration of the dispute and any potential associated liability.

The Arbitration Process:

Although parties involved in a dispute can agree to arbitrate at any time, most arbitration is driven by a pre-dispute contract entered into between the parties, in which they agree that if a dispute should arise, it will never get into the court system. By agreeing to arbitration, parties waive their rights to a trial by jury. After binding arbitration, there is no option to have a second trial conducted by a court. Unless otherwise agreed, an arbitration decision is generally legally binding and non- appealable.

Generally speaking, an arbitrator is an impartial third party chosen by the parties to determine liability. The arbitrator will review relevant evidence and hear testimony in order to render an opinion on liability and damages (the arbitration “award”) after the hearing. Once confirmed by a court of appropriate jurisdiction, the award can be subsequently entered as a judgment.