Arbitration Is Often A Smart Way To Resolve Disputes
More and more parties are choosing arbitration rather than litigation to resolve their disputes, because they believe it is faster and less expensive. That is not always the case because unlike the court system, which is free after the filing fees are paid, in arbitration, after the filing fees are paid (and they are usually higher than in the court system), the arbitrator must also be paid, just like an attorney. Thus, there are a number of factors that parties should know before choosing arbitration.
Arbitration is binding — Unlike non-binding mediation, arbitration is binding on the parties involved. An arbitrator’s decision can be immediately filed in a court of law and turned into a judgment. It’s enforced just as if the parties had gone to court, had a trial and completed any appeal. This allows an arbitrator’s decision to be legally effective and enforced immediately.
Arbitration is not appealable — As mentioned above, at the conclusion of arbitration, an arbitrator’s decision can be immediately filed in a court of law and turned into a judgment.Except in the rarest of circumstances such as an arbitrator committing fraud, the arbitrator’s award cannot be appealed. Once the award is made, it’s usually final, unlike a decision in a court of law, which can be appealed. Also, unlike in a court of law where a judge writes his or her in the decision, there is no such requirement in arbitration. You could spend hundreds of thousands of dollars in arbitration and come out with a decision which is nothing more than a numerical calculation and cannot be appealed.
Arbitration is not free — Once an arbitration is filed, you will receive a list of arbitrators to chose from. Some are lawyers and some are not, but in either case, they will charge you an hourly rate. Sometimes, depending on the value of the dispute, there may even be more than one arbitrator.
Is Arbitration Is An Option For You?
All said, arbitration can be a cost-effective and efficient means of resolving a dispute and should be considered when drafting a contract. But it’s absolutely critical to draft the arbitration clause(s) optimally and retain an experienced lawyer who will expertly understand all issues at play should arbitration arise.
At the New York and New Jersey Law Offices of Michael P. Berkley, P.C., we are ready to bring our comprehensive knowledge gained in more than 30 years of construction experience to help clients draft arbitration clauses in contracts and to represent them should arbitration arise. We take the time to understand all aspects of our clients’ cases by working one-on-one with them and either ensuring that the arbitration clauses are airtight or fighting aggressively for their rights in dispute resolution.