Arbitration Basics
Arbitration blends some elements of mediation with those of a formal court proceeding. Like mediation, the process is relatively informal. Unlike mediation, parties to an arbitration agree to authorize the appointed arbitrator - like a judge in a court proceeding - to act as a fact finder, to determine the weight and relevancy of evidence, to assess witness credibility, and, ultimately, to render a decision that resolves the case. Parties may choose to represent themselves or be represented by legal counsel.
Arbitration may be required by contract or may be voluntarily entered into by the parties to the dispute. Except for certain types of high-dollar complex commercial disputes, that may require a panel of three arbitrators, most cases will be conducted and decided by a single neutral arbitrator.
Whether the arbitration occurs before a single arbitrator or a panel of three arbitrators, the process is essentially the same: the parties agree to give the arbitrator(s) the authority to resolve their dispute. Parties may agree that the decision of the arbitrator shall be binding and not subject to further review or challenge.
In addition to greater efficiency and lower cost, parties may, and typically do, agree that the proceedings and the final decision of the arbitrator shall remain strictly confidential, meaning simply that no public record of the dispute will exist. This feature is attractive to commercial counterparties and individuals alike.
