A Judgement Call - Arbitration

Disputes happen.  They can happen both in business relationships and marital relationships, usually leading to some sort of separation, whether that is between a husband and a wife or between a business and a client – or even two businesses that were working together.  The disputing parties have to decide how they are going to resolve their dispute.  Ideally, they resolve the dispute themselves so that both sides end up with a satisfactory resolution they can live with.  However, sometimes the parties cannot come to an agreement and a third party is needed to settle a dispute.  In these cases they can either go to court or they can go through the process of arbitration. 

How It Works

After filing for arbitration, a meeting date will be set and then the disputing parties will meet with the impartial arbitrator.  It is absolutely essential that the arbitrator be unbiased or the entire process may be rendered null and void.  The arbitrator must hear both sides of the dispute and then make a decision.  They have to decide if one party has indeed wronged the other and also how the wrongdoing must be compensated for or corrected.   Going through the process of arbitration rather than going to court allows the parties to have their dispute resolved faster and cheaper than they would otherwise.  However, there is one serious disadvantage to the process of arbitration and for many it could be a deal breaker.  Once the arbitrator has made a decision, the decision is final.  You cannot appeal the decision of an arbitrator.  You are legally bound to whatever the arbitrator has decided.  You can’t go over the arbitrator’s head by going to court.  The arbitrator is the final decision maker in your case.  The only way that you can challenge the decision of an arbitrator is if you can prove that the arbitrator was biased toward one of the parties. 

Alternatives to Arbitration

In addition to regular arbitration, there is also a process called simplified arbitration.  It can only be used for smaller claims of less than $25,000.  The process is simplified because nobody appears in person.  The arbitrator instead reviews documentation provided by both parties in order to make a decision.  Another option is mediation, which is even faster than arbitration.  It may allow both parties to reach an agreement without having to worry about the permanence of an arbitrator’s decision.  If the parties do not come to an agreement, they can then move on to an arbitrator or a judge.