Arbitrations are presided over by special judges who rely on the law for guidance when delivering their decisions. Arbitrations are conducted in a manner similar to a regular courthouse trial with the arbitrator hearing witnesses testify and admitting documents and other information into evidence; however, arbitrations are usually less formal than litigation and are conducted away from the courthouse in private settings.
Former Chief Justice Burger once said, “The notion that most people want black-robed judges, well-dressed lawyers, and fine paneled courtrooms as the setting to resolve their dispute is not correct. People with problems, like people with pains, want relief, and they want it as quickly and inexpensively as possible.
In arbitration, there is usually one person, the arbitrator, that decides the outcome of the dispute, but in some cases, the parties may decide that they want to use a panel of three arbitrators instead of just one.
If parties choose non-binding arbitration, the arbitrators make a determination of the rights of the parties, but their decisions are not binding. Non-binding arbitration is used by the parties to get opinions on the strengths and weaknesses of their cases, but no enforceable orders or awards are issued. After the parties get the arbitrators’ opinions, they are then free to take their disputes on to court or binding arbitration. Often the non-binding opinions of the arbitrators influence the parties to go ahead and settle.
Parties may also decide on binding arbitration. In courts of law, decisions made by judges may be objected to by appealing to a higher court. In binding arbitration there are limited avenues for appeal, so parties generally accept the arbitrators’ decisions and get on with their lives.
Arbitration does not involve interested based negotiation and the parties give up control of their decision making powers to the arbitrators. However, in appropriate circumstances, arbitration can offer real business value as a quick and less costly alternatives to the traditional court system.
We are committed to helping our clients craft creative solutions to resolve their disputes in a timely and economical manner, and will recommend arbitration as opposed to litigation when a decision by a third party is needed to resolve a dispute.