The Arbitration Process

(Page 2 of 2 of Arbitration Basics )

Here's what to expect in a typical arbitration.

Initiating the arbitration. If your agreement requires you to use one of the large arbitration associations, the agency helps select the arbitrator, or panel of up to three people for more complex cases, who will hear and decide the dispute. These agencies usually impose their own procedural rules and oversee the housekeeping details such as notifying the parties about when and where to meet.

If no group has been specified, the parties are on their own to administer the proceeding, choose arbitrators, and set the schedule and rules that will control. Such ad hoc arrangements are often quicker and less expensive than when an agency is involved, but require a fair amount of cooperation between the disputing parties, who must agree on important matters, such as which arbitrator will decide the matter.

Pre-hearing conferences. Brief conferences are sometimes held before the arbitration hearing to sketch out details such as the need for confidentiality throughout the entire process and to iron out hotly contested issues, such as whether an arbitrator can also decide related claims.

The arbitration hearing. Unlike trials, which are generally confined to courtrooms, the parties can agree to have arbitrations in any convenient setting, although a neutral office or conference center is usually deemed best. Cost, formality, and location also weigh into the decision.

At the hearing, each side has the chance to present his or her version of the conflict, usually with a brief opening statement bolstered by evidence such as relevant contracts and other paperwork, and tangible things -- for example, a piece of broken or shoddy merchandise if that plays a role in the dispute. Witnesses may also be called to testify and be questioned and cross-examined.

That is usually followed by brief closing arguments during which both sides summarize the evidence, explain how it relates to the individual theory of the case, and set out why the arbitrator should rule in his or her favor. In some arbitrations, there are no closing arguments, but the parties are encouraged instead to write out their theories and evidence in post-hearing briefs.

The arbitration decision. Arbitrators are free to base their decisions on their own ideas of what is fair and just. Unlike judges, they are not required to follow the law or the reasoning of earlier case decisions.

Most will submit their decisions in writing -- sometimes as a simple statement of who won and how much money is due him or her, sometimes with explanations and a rationale of the reasoning ranging in length from a few to dozens of pages. While one goal of arbitration is to get disputes resolved quickly, arbitrators operate under widely varying deadlines -- from ten days to six months -- as to when their decisions are due.

Appealing the arbitration decision. Arbitration decisions are usually regarded as final and it is very tough to get a court to review or vacate them. Generally, an arbitrator's decision can only be appealed if there is proof that:

  • corruption, fraud, or undue influence was used in securing the award
  • the arbitrator was corrupt or biased
  • the arbitrator refused to postpone the hearing even though there was sufficient cause to delay it, or
  • the arbitrator exceeded his or her power.

For more information on alternative ways to resolving disputes outside the courtroom, see Mediate, Don't Litigate: Strategies for Successful Mediation, by Peter Lovenheim and Lisa Guerin (Nolo). And for specifics on alternative methods of resolving divorce issues, such as child custody, see Divorce Without Court: A Guide to Mediation & Collaborative Divorce, by attorney-mediator Katherine E. Stoner (Nolo).

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