Monday, April 6, 2009

Arbitration as an alternative to trial

Litigation can be expensive. Fortunately, most contested issues in domestic relations cases resolve themselves before trial. Notwithstanding, when the parties cannot agree the decision will be made by a third party. The third party is typically a Judge, but can also be an Arbitrator at the request of the parties.

At Arbitration, the parties pay a qualified, private, third party to decide the case. The Arbitrator's decision is binding.

Why would anyone want to Arbitrate a case when the Judge can decide for free?

Trial before a Judge can be expensive and slow. Adhereance to the formal rules can substantially increase the cost of litigation and the Judge's docket is often very long resulting in long delays. Arbitration is typically an informal process and the arbitrators' schedules are typically more flexible than a Judge's.

Arbitration can be used strategically as well. For example, the decision to arbitrate can be used to forum shop (choose a more favorable person to decide your case). Alternatively, the client's may want to introduce evidence without the risk of public disclosure at trial.

Why would anyone not want to arbitrate a case?

The answer is simple. In Arbitration there is no right to appeal. When a Judge decides a case, there is an absolute right to appeal.

The arbitrator's decision stands unless there is fraud, corruption or misconduct. If the Arbitrator makes the wrong decision, the decision will stand, even though a similar decision from a Judge would have been overturned on appeal.

It is important to clearly evaluate the pros and cons of arbitration. While arbitration can be an efficient and economical manner of resolving a disputed claim it can come at a cost.


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