Legalese — Arbitration

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Most of us have heard the word ‘arbitration’ at some point, but not everyone is sure about what it is.  Arbitration is a type of alternative dispute resolution, like mediation, but the neutral third party has the authority to make a decision, or rule, on what he or she hears.    It’s a trial, but instead of a judge, you have a private person making the decision that you have chosen yourself.

Why, you may ask, would you choose to have a private third party make a decision about your dispute instead of the professional courts and judges?  Well, there are a number of advantages that arbitration has. 

In arbitration, you get to pick your decision maker.  When you go to court, you don’t have that luxury.  In fact, it’s a big no-no and is called ‘forum shopping’ and it is forbidden.  Not all judges are alike, and a good lawyer will be familiar with the judges in the court you are filing in and will know how they tend to make decisions and their overall philosophy.  In many cases, judges have a lot of discretion.  Sometimes, you get assigned to a judge who, on a fundamental, philosophical level disagrees with the point you are trying to make.  In hiring an arbitrator, you get to pick the person who is making decisions about your dispute.  In many cases, this gives the parties more trust in the decision because it isn’t random.

You also can make sure that, if necessary, your judge has subject matter expertise.  Some cases are very complicated.  You may want to make sure that the person making decisions about the dispute understands the difficult facts – this may be someone who is especially good with accounting, or someone who is familiar with how the construction industry works, someone who is well acquainted with mental health issues, or someone who is an expert in a particular body of law.

Another advantage is that you can have some control over how the hearing happens.  Arbitration allows for flexibility in the rules.  The rules of evidence can be relaxed, you can pick the time and date of the hearing yourself, and you can do out-of-the-box things like have the hearing done entirely by submitting the documentation to the arbitrator and have them decide based on that alone.  In a court of law, the rules of evidence have to be followed strictly, you are beholden to the judge’s calendar, and there is a lot of formal procedure that can be time consuming and inefficient.  This means that, through arbitration, you can often have your decision much more quickly.

Privacy is another advantage.  When you file something in a court, without a special court order, everything is public record.  Due to the open court system, anyone who wants to can sit through your trial and hear whatever is said.  For a lot of reasons, people don’t always want their dirty laundry aired n public.  You can agree that your arbitration and all the paperwork connected with it is private, something that is usually not available to you in a court of law. 

Arbitration decisions are difficult to overturn.  Some people think this is an advantage: when you get a decision from an arbitrator, it likely can’t be appealed, so once you have a ruling you are done.  In court, the appellate process can literally take years, meaning your dispute drags on that much longer.  Some people, however, think this is a disadvantage, because it means if you don’t like the arbitrator’s decision, you are stuck with it. 

You can find arbitrators in many different ways.  Many are private (like me!) and you can find lists of them through the Georgia Office of Dispute Resolution – Georgia Commission on Dispute Resolution (godr.org) by clicking the “find a neutral” link.  You can go through private companies or national organizations like the American Arbitration Association | ADR.org or JAMS: Mediation, Arbitration and ADR Services (jamsadr.com) .

Nothing in this article should be construed as legal advice.  It is being offered for informational purposes only.

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