Arbitration
Candlefocus EditorUnlike filing a lawsuit, an arbitration proceeding begins when a party or parties notifies the other of their intention to submit a dispute to arbitration. They must submit a “demand for arbitration” which states the dispute, the remedies sought and the parties involved. The parties generally then have 30 to 60 days to select an Arbitrator. The Arbitrator must be legally qualified and impartial of the dispute.
During an arbitration hearing, all parties to the dispute are represented by lawyers, who present evidence and make their arguments. The Arbitrator weighs the evidence and information presented before making a decision. It is important to note that the Arbitrator's decision is binding on the parties involved and is legally enforceable.
Like a lawsuit in court, an arbitration hearing typically involves discovery and pre-hearing documents. However, the costs for filing documents and for making an appearance in an arbitration hearing can be much lower than filing documents in court. Disputes involving less than $50,000 generally do not require in-person hearings. Those ranging from $50,000 to $100,000 do require an in-person hearing with a single arbitrator.
Arbitration may be preferable over filing a lawsuit. Parties may find the costs and time commitments to be less than those associated with a lawsuit. They may also choose to use arbitration in order to maintain a good business relationship. The proceedings of an arbitration hearing are usually not public like in a court. As such, it can help to keep the private details of the dispute out of the public eye and help to preserve a business relationship.
In short, arbitration is a great alternative to filing a lawsuit. It affords parties the ability to quickly and effectively resolve a dispute with minimal cost and time commitments. This makes it an attractive option to many businesses, especially when attempting to preserve a business relationship.