Arbitration is an alternative to court litigation. It is a structured, confidential process in which an arbitrator, rather than a judge, hears each side of the case and issues a final ruling that is binding on the parties.
Arbitration is an option only if all the parties agree to the process. The parties sign an agreement to arbitrate that specifies the attorney who will serve as arbitrator. The agreement typically provides that the decision of the arbitrator is final and not subject to appeal. Sometimes, the parties agree in advance that the arbitrator’s decision will be binding only if it falls within a certain dollar range. These “high-low agreements” have the benefit of protecting both sides from a result that neither expects.
An arbitration hearing is similar to a trial in court but less formal. The arbitrator is much like a judge and must maintain complete neutrality. The attorney for each party has a full opportunity to present his or her case. After reviewing all the evidence, arbitrator issues a written decision based on applicable law.What are the Advantages?
Arbitration can be an excellent solution for a family that is involved in a probate or elder law related dispute. It is particularly suitable when both sides feel strongly that their position is correct and would prefer to have a neutral arbitrator decide the case rather than enter into a settlement.
- Speed: Arbitration is typically faster than court litigation. The parties agree to a specific schedule to present the case. An arbitrator blocks out full consecutive days so that the hearing can be completed in an efficient manner.
- Lower cost: A faster resolution of the dispute dramatically reduces attorney’s fees and other litigation expenses.
- Privacy: Arbitration proceedings are entirely private, which avoids disclosure of sensitive family information. Courts proceedings, by contrast, are open to the public.
- You pick the arbitrator: You don’t have any input into which judge hears the case in court litigation, and you might even have different judges at various stages of the proceeding. In arbitration, the parties pick an arbitrator who handles the case from start to finish.
- Finality: Arbitration yields a final, binding outcome that is not subject to further litigation. This is very different from litigation because a judge’s decision can be appealed to a higher court, resulting in further cost and delay in resolving the case.
- A case goes to arbitration only if all the parties involved in the case agree. They must also agree on an arbitrator and must specify how the parties will divide the arbitrator’s fee. All these details are spelled out in an Agreement to Arbitrate document.
- The arbitrator schedules the hearing at a time and location that permits all the parties and their attorneys to participate. If the case will take more than one day, the arbitrator will try to block out consecutive days so the case can be heard all at once.
- At the arbitration hearing, the attorneys for the parties present their respective cases to the arbitrator. Each side may call witnesses to testify, and the arbitrator will permit the attorney for the other side to cross-examine those witnesses. The attorneys may also submit written information as exhibits.
- Shortly after the hearing concludes, the arbitrator sends a written decision to all the parties and attorneys. The parties are required to follow the decision in accordance with the terms of the Agreement to Arbitrate.
The decision to use arbitration instead of court litigation is an important one that you should make in consultation with your litigation attorney. The main difference between the two is that mediation, if successful, ends with a voluntary settlement agreement. Arbitration, on the other hand, ends with a final and binding decision made by a third party.
To learn about mediation, another alternative to litigation, click here...