What is the Process of Arbitration and How Does it Differ from Court Trials?
Arbitration arises from the provisions, in many contracts, that require that all parties to the contract seek resolution through arbitration rather than through the Courts. That being said, many people mistake arbitration for a process involving negotiation and settlement.
Arbitration is very much an adversarial process with some significant differences between arbitration and Court cases, but with many similarities. The difference is that Arbitrators are appointed and serve as private judges. They are selected by the parties through a random selection and strike process and are typically very familiar with the subject matter of the Arbitration. Although this is typically preferable to a judge, who needs to be a jack of all trades at some level, it also poses certain dangers in terms of a potential bias against one of the parties.
However, the parties are protected from being stuck with a biased Arbitrator through the disclosure process, which is quite rigorous and requires that the Arbitrator disclose any connection or biases before accepting appointment to the case. In this respect, Arbitration is superior to being in Court, as a sitting judge does not have to make any disclosures.
Once an Arbitrator is selected, the Arbitrator sets up a preliminary hearing which is similar to a Case Management Conference in a Court case. They then schedule for discovery and motions before the final hearing is set.
The Arbitrator is paid by the hour for all of the time he or she works on the case, and parties must advance deposits to cover the Arbitrator’s time. That being said, arbitrations can proceed more quickly and disputes can be more efficiently resolved provided parameters are set at the outset of the Arbitration and a prompt final hearing date is set.
Arbitration may be used in virtually any dispute other than Criminal cases and Family Law cases, depending on whether the parties agreed to Arbitrate in a written contract. Arbitration may be required for any of the following: breach of contract, collection, construction, homeowner association disputes, employment disputes, shareholder disputes, and real estate titles. The agreement for Arbitration needs to be stated in the original contract, agreed to by the parties.
Susan Barilich is a Qualified Arbitrator with the American Arbitration Association
Attorney Susan Barilich has represented clients in arbitrations involving breach of contract, collections, construction disputes, shareholder disputes, real estate title disputes, and disputes involving commercial real estate purchase and sale agreements. In 2008, she was invited to sit as an Arbitrator on the commercial and construction panels for the American Arbitration Association. This is another cornerstone of her solid experience as an attorney.
