Arbitration
Arbitration is perhaps the most well-known ADR technique and generally denotes submission of a dispute to a third-party for binding or non-binding resolution after a hearing in which each side presents evidence and argument of counsel. In this way, arbitration differs from mediation and other structured settlement techniques, which are far less adversarial. Arbitration can be voluntary or mandatory as, for example, in a fee dispute between an attorney and his client where the client requests arbitration.
In voluntary arbitration such as where the parties contractually agree to arbitrate disputes arising under a contract, the parties are able to define the procedures that will govern the arbitral proceedings, including what, if any, discovery will be allowed or whether traditional evidentiary rules will apply to the arbitral proceedings. If the parties fail to define the procedures governing the arbitration, the procedures set forth in any applicable arbitration statute govern. Typically, an arbitrator is not bound to follow substantive law, but may also employ concepts of equity and justice, business practice and whatever technical expertise he or she brings to the process. If confirmed by the court, an arbitration award is enforceable like any court judgment, but unlike a judgment rendered by a court, appeal from an arbitral award is generally not available for errors of law.
Arbitration can have distinct advantages. It allows the parties to select the decision-maker(s) as well as the procedural rules governing resolution of their dispute. Unlike many other ADR techniques, credibility of witnesses can be adjudicated. The proceedings occur at a place and at times mutually convenient to the parties and are not subject to delays imposed by a trial court's crowded docket. In addition, arbitrations are typically confidential.
Arbitration may also have disadvantages. Some argue that arbitrators tend to "split the baby'' in trying to give something to all parties. Discovery is generally limited, which may disadvantage a party needing compulsory process to obtain information to support his case. Arbitration will not be desirable if one wants a jury trial. Finally, as noted above, arbitral awards are usually not appealable except for fraud, corruption and defects aimed at the process that rendered the award as opposed to the substance of the award.
