Alternative Dispute Resolution: The Basics of Arbitration

Two parties coming to an agreementWhile the law provides people the chance the settle disputes in the courtroom, there are times when it’s better to avoid litigation. This is the prime idea behind alternative dispute resolution, such as arbitration.

Arbitration involves the use of a neutral intermediary who will hear arguments from opposing parties and will make a final and binding decision as a resolution to the dispute. This intermediary is usually a retired or practicing attorney or judge, who is selected by both parties.

Learn more about arbitration resolution services.

Is Arbitration Right for You?

To settle a dispute via arbitration, both parties must agree to arbitrate. This process differs from litigation in a way that the individual who has been served a lawsuit should respond or else be forced to accept a default court judgment. This means that while in most cases, arbitration could be used in place of litigation, both parties should agree to it.

Employees and employers are usually required to settle disputes via arbitration. This stems from the fact that companies prefer to resolve issues without involving the court as much as possible. In fact, majority of consumers and employees don’t know that the simple act of agreeing to the terms and conditions of the seller or employer also means that they’ve agreed to use arbitration to resolve any issues they might have. Employees likewise sign contracts with arbitration clauses when they’re hired.

Important Things to Remember

Not all arbitration clauses are simple and could contain rules on various matters, such as the selection of arbitrators, the location of the arbitration process, deciding who will pay for fees, and if the award should be kept confidential or not. In addition, clauses could be voluntary or mandatory and the final decision could be non-binding or binding.

It’s likewise vital to note that appealing a final decision isn’t usually an option with arbitration, says a lawyer who also offers arbitration resolution services. That said, decisions are usually considered final, unless stated otherwise in a clause, and it’s extremely difficult to ask the court to review or overturn the ruling.

Consult an experienced arbitrator if you feel you need to resolve a dispute that could be fixed with arbitration. This is also the best option if you don’t want to deal with the cost and stress that come with litigation.