Arbitration and Mediation



Arbitration

Parties, whether companies, retailers, or individuals, often hire lawyers to represent their interests in arbitration. Our firm has represented clients, including in many states other than Ohio, in over 75 arbitrations. We take the time to listen to the details of our client’s situation, focus on our client’s goals, and suggest strategies that will lead to the best results possible under the law.

What is arbitration? Arbitration is a dispute resolution process that takes place outside of court when the parties have agreed to resolve disputes by submitting them to an independent, neutral decision-maker.

Arbitration clauses are common in many contracts. If you have signed an employment agreement, a credit card contract, a car insurance application, or a variety of other contracts, you have probably already agreed to arbitration without even realizing it. If an agreement makes arbitration mandatory, the dispute must be resolved through arbitration. The parties give up their right to sue in court, participate in a class action lawsuit, or (except under very limited circumstances) appeal the arbitration decision.

How does it work? An arbitration agreement may require that disputes be arbitrated through a particular arbitration association, or leave it up to the parties to agree upon a particular arbitrator. Arbitration is more streamlined than litigation but it is not a simple process. The arbitrator may follow the rules of an arbitration association, set his or her own procedures, or apply certain rules of evidence or procedure. The parties will likely engage in fact finding procedures (called “discovery”) and then meet for an in-person “hearing,” where the arbitrator may listen to in-person statements from the parties, questioning of witnesses, and ask for clarification of information. A hearing may not be necessary if the issues can be dealt with entirely from the documents, or if the applicable rules do not provide for in-person hearing when the amount in issue is below a certain amount.

Is an arbitrator’s decision enforceable? Arbitration is generally just as final and binding as a court order (unlike mediation, which is non-binding). After reviewing evidence from both sides, the arbitrator will make a final decision (called an “award”) that will document his decisions. Arbitration is governed by state and federal laws that provide basic guidelines for the arbitration as well as procedures for confirmation of an arbitrator’s award. If an award is confirmed, it is given the force and effect of a court judgment.

What are the advantages of arbitration? The following are often identified as being advantages of arbitration over court action:

Choice of Decision Maker – If the dispute is of a technical nature, the parties can choose a technical expert as arbitrator, so that he will be able to readily understand the evidence to be presented.

Efficiency – Arbitration is usually completed more quickly than a court proceeding.

Privacy – Arbitration hearings are private and the media and members of the public are not able to attend. Awards are not published, and are not directly accessible.

Convenience – The parties arrange conferences and hearings at times and places to suit the parties, arbitrators, and witnesses.

Flexibility – The procedures can be segmented, streamlined, or simplified, according to the circumstances, subject to the parties’ agreement.

Finality – Generally, an arbitration award is not appealable.

What are the disadvantages of arbitration? Some of the most commonly perceived drawbacks of arbitration.

Cost – One or both of the parties will need to pay for the arbitrator’s services, while the court system provides an adjudicator who does not charge a fee. This cost may be offset by the increased efficiency of arbitration.

‘Splitting the Baby’ – Because of the relaxation of rules of evidence in arbitration, and the power given to the arbitrator, the arbitrator may render an award that, rather than granting complete relief to one side, gives each side only part of what they wanted.

More evidence admitted – Rules of evidence may prevent some evidence from being considered by a judge or a jury, but an arbitrator may consider that evidence. Therefore, an arbitrator may base his decision on information that a judge or jury would not consider at trial.

Less information obtained – During a court proceeding, the applicable rules require the parties, or even a person or business entity who is not a party to the case, to provide certain information or documents, and may give the parties the right to obtain sworn statements from non-parties. In arbitration, the parties have fewer tools to use to gather information.

Not appealable – A court has limited powers to set aside an award under very limited instances, such as outright corruption, fraud, or bias. An award, even if the arbitrator misapplied the law, is typically upheld by the courts.

Mediation

Mediation is a negotiation process in which many disputes can be settled through the assistance and facilitation provided by a skilled mediator.  Not every case is suitable for mediation, and sometimes properly timing when to engage in the process is the key to reaching a just resolution of a dispute.