Arbitration: Legal Definition
Posted on April 5, 2019 | Categorized:
Arbitration is a form of dispute resolution that uses a trained arbitrator or a tribunal to resolve a legal dispute, such as a claim. As an alternative to litigation, arbitration keeps the parties out of the courtroom and instead relies on an arbitrator to review the evidence and make a decision. In general, arbitration is legally binding. Courts can take legal action to enforce decisions made by an arbitrator or tribunal.
Arbitration Has Many Benefits Over Mediation or Litigation
When two warring parties enter into mediation, a mediator tries to help the two parties reach an agreement. While compromises are possible in some cases, this is not always effective. If either party is not happy with the outcome of mediation, they can push for litigation instead of agreeing with the other party. Not only do they have to pay the mediator, they still have to pay to go to court.
Arbitration, on the other hand, ends with a binding and enforceable decision made by the arbitrator. This concludes the case and prevents the need to go to trial. This means both parties save money. When compared to litigation, arbitration is:
- Resolved sooner since there is no reason to wait for a time on a court docket
- Easier to prepare for and complete
- Significantly cheaper, in most cases
In addition, arbitration hearings are confidential. This is important to many parties who do not want the news media to cover the facts or outcome of a case. The evidence and outcome of a court trial are generally public record.
Some Situations Are Better Suited to Arbitration Than Others
Arbitration is generally voluntary, although it may be a contractual obligation in some situations. The cases that rarely rely on arbitration as a solution include:
- Criminal cases
- Legal status
- Family law
Most other types of cases that involve a disagreement between two or more parties may consider arbitration. It is a relatively common and effective type of alternative dispute resolution in the United States.
Understanding How Arbitration Works
Arbitration begins when the parties agree to enter into binding arbitration. This occurs either because the previous contract requires it or because they agree this is the best route to resolve a dispute. When both parties agree to arbitration, the arbitrator’s decision is legally binding.
Next, either the parties will agree to a single arbitrator or each party will select an arbitrator, and the two chosen arbitrators will agree on a third arbitrator for their tribunal. Together with the disputing parties, they will set a calendar for discovery and the arbitration meeting.
In arbitration, the process of uncovering and sharing evidence — discovery — may be much shorter than if the case went to court. In some cases, there is no additional evidence outside of each side’s argument. After hearing the evidence presented by each side, the arbitrator or tribunal makes a final decision.
Our Attorneys Can Answer Your Questions About Arbitration
If you have questions about arbitration or wonder if there is a better way to resolve your case than going to court, the injury lawyers from Chalik & Chalik Injury Lawyers is here for you. We can answer your questions about your Florida dispute and offer options for resolving it. Call us today at 855-529-0269 for a no-cost review of your case.