Arbitration

Arbitration

Arbitration is a process whereby parties in dispute refer their disagreement to a mutually acceptable, knowledgeable, independent third party – an arbitrator – agreeing in advance to be bound by the arbitrator’s decision. It has been said that the arbitrator’s role is similar to that of an umpire in a baseball game. “He calls them the way he sees them” and his word is law.

Anyone with experience in a special field can be an arbitrator. It is not necessary that a lawyer be used. In fact, one of the main advantages to arbitration is the ability to use an arbitrator who has some expertise in the matters involved in the dispute, for example, if it is an insurance issue, then it would only make sense that a seasoned insurance professional hear the case and make the decision, because that person is much more likely to know what is intended and fair than a generalist.

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Meditation

The process of mediation is much different than arbitration. In mediation, the parties refer their dispute to a mediator, who assists them in trying to reach a mutually acceptable settlement. If agreement cannot be achieved then the matter is referred to arbitration or legal proceedings. Since a mediator is not there to make a decision on the dispute, but is there to facilitate some sort of agreement between the parties, it is important that the mediator have qualities which can help in bringing people together, rather than being the pure expert that is required when playing the role of an arbitrator. It is, however, also desirable that the mediator be an expert in the area under dispute, so that s/he can direct the parties properly when needed, or supply them with expert information, that they might not otherwise be aware of.

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Advantages

Whichever method is used to solve a dispute they both have significant benefits over litigation. They are, of course, not the answer for every situation; some disputes are more appropriately and better off dealt with in court, however, for a substantial number of ordinary cases arbitration or mediation is:

  • Faster – Weeks rather than years
  • Expert – Judges are expert in the law but not necessarily in the field that is the subject of the dispute
  • Private – Courts are public forums. For various reasons it may be desirable to conduct the proceedings in private.
  • Less Expensive – Due to the vastly reduced number of hours, the difference in costs amounts to many thousands of dollars per average case.
  • More Likely To Maintain Goodwill – The parties are much more likely to reach an agreement, which is more palatable to both of them.

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