Arbitration is one of various methods that together are referred to as alternative dispute resolution or ADR. As suggested by the name, the idea behind methods of ADR is to provide an alternative to filing a lawsuit and going to court, which is the traditional method for resolving legal disputes. Arbitration and similar alternatives were primarily designed to provide for a streamlined and cost-conscious option to deal with a legal issue. Below we’ll take a look at when arbitration is an option, how it works, and how it differs from going to court.
When can I Arbitrate?
Anyone can agree to arbitrate a disagreement or legal issue, but the key word is “agree”. Simply because one of the parties in a dispute desires to enter into arbitration does not take away another party’s right to go to court. Arbitration only comes about when two parties agree to it, either before or after a legal dispute comes up. For this reason, agreements to arbitrate disputes are typically found somewhere in a written contract agreed to by both parties.
Still, this doesn’t mean that agreements to arbitrate are rare. Far from it. Although many people may not be aware or conscious of it, consumers every day agree to resolve potential legal problems via arbitration (or some other method of alternative dispute resolution) in the course of their shopping, traveling, and numerous every-day transactions. For example, online shoppers may or may not be surprised to discover that if they read the fine print disclaimers or notices on their favorite travel website, it may contain agreements to resolve any disputes via arbitration or a similar form of ADR.
How Arbitration Works
Although arbitration is used broadly to describe a method of alternative dispute resolution, arbitrations themselves can take many forms. In almost any arbitration, however, the complaining party will send the opposing party a notice of their intent to arbitrate a dispute, outlining the basis for the dispute. There is typically a period for response, followed by the selection of arbitrators, and then the hearing itself.
Arbitrations are sometimes presided over by a panel of arbitrators, as opposed to just one arbitrator. Regardless, the selection process is typically outlined either in the contract, but typically some type of input from both parties is requested.
The rules of arbitration themselves can also vary widely. In many circumstances, a contract will specify the rules and timelines that will be applied in a dispute. These are typically more streamlined but parties should refer to their contract or the rules specified therein for the exact rules that govern their dispute. An attorney specializing in alternative dispute resolution can also provide valuable assistance in such matters.
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