Arbitration: What is it?
Arbitration is a form of dispute resolution. Arbitration is the private, judicial determination of a dispute, by an independent third party, or “arbitrator.” Arbitration is an alternative to court action (litigation), is final and binding. The arbitrator is chosen by both parties to the arbitration who hand over their power to decide the dispute to the arbitrator who acts at both the judge and jury.
General principles of arbitration:* The object of arbitration is to obtain a fair resolution of disputes by an impartial third party without unnecessary expense or delay.
* Parties should be free to agree how their disputes are resolved, subject only to such safeguards as are necessary in the public interest.
Advantages Of ArbitrationSupporters of arbitration contend that it has advantages over court action. The following are a sample of these advantages.
Choice of Decision Maker * The parties can choose the arbitrator. If the case involves, for example, a motor vehicle collision, the parties can specially select an arbitrator that has an expertise in traffic laws.
Efficiency * Arbitration can usually be heard sooner than it takes for court proceedings to be heard. As well, the arbitration hearing should be shorter in length, and the preparation work less demanding.
Privacy * Arbitration hearings are confidential, private meetings in which the media and members of the public are not able to attend. As well, final decisions are not published, nor are they directly accessible. This is particularly useful to the employer who does not want his *dirty laundry* being aired.
Convenience * Hearings are arranged at times and places to suit the parties, arbitrators and witnesses.
Flexibility * The procedures can be segmented, streamlined or simplified, according to the circumstances.
Finality * There is in general, no right of appeal in arbitration. (Although, the court has limited powers to set aside or remit an award).
Having cited the above list of advantages, it is only appropriate to mention some of the most commonly perceived drawbacks of arbitration.
Cost - One or both of the parties will pay for the arbitrator*s services, while the court system provides an adjudicator who does not charge a fee. The fees for an arbitrator can be hefty. To give an example, for an amount of claims up to $100,000, the minimum fee for a single arbitrator is $2,000. The maximum fee can reach ten percent of the claim. However, supporters of arbitration argue that this should be more than compensated for by the potential for the increase in the efficiency of arbitration to reduce the other costs involved.
No Appeal * Unless there is evidence of outright corruption or fraud, the award is binding and usually not appealable. Thus if the arbitrator makes a mistake, or is simply an idiot, the losing party usually has no remedy.
Typical Steps in an ArbitrationThe process of arbitration differs among cases. The following is a list of the main steps in arbitration, however it should not be viewed as an exhaustive list.
Initiating the Arbitration * A request by one party for a dispute to be referred to arbitration.
Appointment of Arbitrator * Generally arbitrators are selected by agreement of the parties. Selection is usually made from a list of local arbitrators.
Discovery and Inspection * These are legal procedures through which the parties investigate background information. Each party may engage in the exchange of information with the other side. This is called *discovery*.
Arbitration Hearing * After an arbitrator is selected, the parties schedule an *arbitration hearing* where the claimant sets out a summary of the matters in dispute and the remedy sought in a statement of claim. The arbitrator listens to any oral statements, questioning of witnesses and can ask for clarification of any information. Both parties are entitled to put forward their case and present evidence, such as medical bills, medical records or wage loss evidence.
Arbitration Award * The arbitrator considers all the information and makes a decision. An award is written to summarize the proceedings and give the decisions. The award usually includes the arbitrator*s reasons for the decision