Arbitration and other forms of alternative dispute resolution are used as an alternative to a trial for parties involved in a dispute. In arbitration, parties select a neutral arbitrator (or panel of arbitrators) who will hold one or more hearings at which both sides can present evidence and testimony. After reviewing evidence and testimony of the parties, the arbitrator will render a decision. In most cases, the arbitrator’s decision is final, though arbitration can be either binding or non-binding. In non-binding arbitration, either side can reject the arbitrator’s award, and then the case would proceed to a trial. The arbitrator’s decision is typically not allowed to be mentioned at the trial.
In some cases, arbitration is required because there is a mandatory arbitration clause contained in a contract between the parties. Arbitrators do not have to follow legal precedents, as judges do. They also are not always required to explain the reasoning behind the decision. Arbitration can be performed by one arbitrator or by a panel of several arbitrators.
Arbitration can offer a number of advantages over a courtroom proceeding. First, arbitrations are usually faster than litigation, especially when court dockets are overflowing in many areas of the country. Arbitration also tends to be less expensive than a traditional lawsuit. If the dispute is of a highly technical or scientific type, arbitrators with expertise in that area can be chosen. Arbitration proceedings are usually private rather than public, such as a trial. The fact that arbitrations usually cannot be appealed offers the advantage of certainty for the prevailing party.
Arbitrators in many areas can award a variety of remedies. They include ordering one party to pay a sum of money, ordering a party to do or not to do something, making a declaration as to a matter determined in the arbitration, ordering performance of a contract, and ordering a contract to be set aside. Arbitrators may also be able to compel third parties to comply with discovery demands by disclosing records or other critical information.