Arbitration

In order to promote resolution of cases outside of the courtroom, the courts often favor Alternative Dispute Resolution (ADR). The main methods of ADR are mediation and arbitration. Mediation is essentially a standard settlement discussion but with an intermediary helping the two sides negotiate. It is also non-binding, meaning if no resolution is made, you end the day in the same position you were in when you began.

Compare mediation to arbitration and you will see a stark difference. Arbitration is where a person or persons hear your case and decide the merits and damages. Essentially the arbitrator(s) act as a judge. When arbitration was first introduced to the legal community it was seen as a godsend. It was sold as a quicker and cheaper way to resolve cases than going all the way to trial.

The justification as to why it is cheaper and quicker is because you aren’t bound to the same procedural rules you are in a normal case. You are essentially bound to the rules you agree to. This can lead to shortened discovery and pre-trial hearings. Additionally, because there are no juries, an arbitrator can make a decision much quicker.

That may have been how arbitration initially worked, and it is definitely still how it is sold today, but that is not how modern arbitration works. Studies have shown that arbitration can be as expensive, if not more expensive than going all the way to trial. The reason is because not only do you have to still pay your attorneys, but now you have to pay the equivalent of the judge. This can add up very quickly.

Additionally, it tends not to be a very neutral process. If you are the one pursuing a claim against someone, it is likely that the arbitrator will do their best to find against you. Why? Because you are a one-time customer, whereas the person you are suing has likely used them before and will use them again if they get a favorable result. In other words, the arbitrator is like any other businessperson, they want to provide good customer service to get repeat customers.

Now, that doesn’t mean all arbitrators are like this, nor does it mean just because you go to arbitration you will definitely lose your case. But what it does mean is that even if your burden of proof is only a preponderance of the evidence, you should be prepared to have make a much higher showing to win.

Something to keep in mind is that arbitration can only occur if you have agreed to it. However, most arbitrations don’t occur because the parties agreed to it after a case was filed, but instead the claim is in some way contractual in nature.

The most common contract would be a dispute with a consumer goods manufacturer or provider. However, many employment contracts also have an arbitration clause. If you have a claim against a defendant but our bound by an arbitration clause, you should speak with an attorney as it is possible that you can get around the arbitration clause and have your day in court.