In an earlier article we discussed the most common form of alternative dispute resolution, more commonly referred to as ADR, mediation.
In this post we are going to discuss arbitration, which is much more complicated and much less common.
All ADR is designed to resolve a case with a minimal amount of court involvement.
Arbitration can be thought of as a "mini trial", as opposed to mediation which is just people talking and settling a case.
In arbitration there is an arbitrator, who acts as judge. They will hear the evidence and make the ultimate decision. If a lawsuit has been filed then that decision can then be formally adopted by the real judge and signed as a judgment. The parties can also agree to accept the decision, pay according to it, and never have a judgment entered, instead entering a settlement agreement and dismissing the case.
An arbitration takes many forms. They can be as formal as a "real" trial or as informal as everyone agrees. Usually the same rules of evidence and procedure apply but the parties can also agree to something different. One thing that is pretty common is for the parties to agree that the depositions taken in the case will be entered as evidence and read by the arbitrator later as opposed to actually having to read the sections out loud to the judge or jury as is done in a regular trial. It is extremely important that all parties know and understand the rules they will be operation under at the actual arbitration so they can prepare their case and the evidence accordingly.
There are two types of arbitration, binding and non-binding with binding arbitration being the most common. Binding arbitration means the decision of the arbitrator is final, that decision then being entered as a judgment. Non-binding means the decision is not final and the parties can proceed to a regular trial if they choose.
Arbitration is becoming more common as more contracts contain language requiring it. In addition, more attorneys are becoming familiar with it and the savings in time and expense while still allowing a party to have their "day in court" make it a very tempting alternative.
The video below is doen by the California Court system and both explains arbitration then shows an example of what it looks like.
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