Arbitration: What Is It?

February 6th, 2018

Many people understand that when a claim is filed the end result could be litigation if there is not a settlement earlier in the process. However, many people don’t realize that another solution besides litigation is arbitration. Arbitration is an alternative dispute resolution and thus provides a different process than filing a lawsuit and going to court. So what exactly is arbitration?

The Arbitration Process

As an alternative dispute resolution, arbitration takes place out of court. The two parties involved select an impartial third party referred to as the arbitrator, who will facilitate the arbitration process. Sometimes arbitration hearings are facilitated by a panel of arbitrators, as opposed to just one. However, this selection process is normally outlined in the arbitration contract with some input from both parties as requested. Additionally, arbitration proceedings are generally private and the parties will agree to keep the terms and final resolution confidential. This is helpful if the subject matter of the dispute is embarrassing or could reveal private information.

The arbitration process is fairly similar to litigation. For example, both parties can present evidence and make arguments as well as call witnesses and provide testimony themselves. However, there are some advantages to choosing arbitration over litigation. One advantage is avoiding hostility. Since the parties involved in an arbitration proceeding participate more and sometimes help structure the resolution, the parties can work together rather than try to one up each other in the courtroom. Additionally, arbitration is usually cheaper and faster than litigation. The parties don’t have to wait to be scheduled on the court calendar and arbitration hearings can be scheduled on the weekends and evenings. Subsequently, the rules of evidence and procedure do not apply in arbitration proceedings and neither does the discovery process. Therefore, interrogatories, depositions, and requests to produce documents do not appear in the arbitration process and help speed up the proceeding in general.

When Can You Challenge An Award?

Ultimately, parties who agree to arbitration are bound to the agreement and to the final award determined by the arbitrator. This means parties cannot appeal the award simply because they do not agree with the outcome. There are four grounds on which a court may vacate or overturn an arbitration award. The first is when the award was a result of corruption, fraud, or undue means. Subsequently, if the arbitrator was partial or corrupt, the disadvantaged party can challenge the award. Additionally, if the arbitrator refused to postpone the hearing or hear pertinent evidence and when this misconduct prejudiced the rights of one of the parties, that party can again challenge the award. Finally, if an arbitrator exceeded his powers or executed them in such a way that a mutual, final, and definite award was not made, the disadvantaged party can appeal.

Contact Us Today

Here at the Bottaro Law Firm our legal team is experienced in both arbitration and litigation. If you have sustained a personal injury contact us today to see if you have a claim. You can call or text us at 401-777-7777 or complete our online form.