Arbitration FAQ’sWhat is arbitration?
• Participation can be voluntary or involuntary. Resolution is imposed on parties by a third-party neutral.
• The process can be either binding or non-binding. In a binding arbitration, the arbitrator makes a final and binding decision that can be enforced in court. In a non-binding arbitration, the arbitrator only recommends a decision.
• Presentations made to the arbitrator are limited by agreed to rules established by the parties.
• The process is usually private. Only the people directly involved in the dispute, those who represent them, and those who are integral to the resolution of the problem should be in attendance at the arbitration.
• Arbitration is confidential. There is no need for others to know about what happens in the arbitration unless the participants and the arbitrator agree that it would be beneficial, or there are compelling reasons to limit confidentiality.
• The arbitrator controls the process and outcome of the arbitration.
What is the role of the arbitrator?
• Listens to the facts and evidence presented by counsel
• Follows the rules of evidence
• Hears witnesses and cross examinations
• Renders a final, binding award upon conclusion of the arbitration
What are the different Arbitration processes?
A process that is similar to arbitration in everything but the decision is only recommended and not binding.
Each party unilaterally appoints one arbitrator, after which the appointed arbitrators or the parties agree on a third, neutral arbitrator. Absent an agreement between the parties, their selected arbitrators are normally assumed to be aligned with the side that appointed them and to lack the neutrality expected of the third member of the panel, who serves as the ultimate decision maker in the dispute.
This process is similar to Binding Mediation, except that prior to mediation, the parties may agree that if agreement is not reached, that an arbitrator, different from the neutral, will be employed to resolve the open issues.
This is the opposite of Med-Arb. The parties first arbitrate the matter, then the arbitrator makes a decision, but reveals the arbitration results only if there is no agreement in the following mediation. The arbitrator’s decision, having already been made, will not be influenced by any confidential information of the parties.
Final Offer Arbitration – Baseball Arbitration
This process received its name because it is often used in player salary negotiations in major league baseball. Each party negotiates until the point of impasse and then each party makes an offer to settle at a particular dollar amount. The two figures are then submitted to the arbitrator, who must choose between them. The arbitrator does not have the authority to modify the figures submitted, or select another figure. This process encourages the parties to make reasonable demands at the onset.
When high-low arbitration is chosen, specific Supreme Court rules can apply which both the neutral and the parties must follow: “90(c)” packages are submitted to the neutral and the other parties involved one to two weeks prior to the conference. The parties also agree on a high and low number, which act as the ceiling and floor of the award. The high and low numbers are not disclosed to the neutral. This allows everyone to come prepared, and eliminates possible surprises. This process, with decisions being based solely on the law, submissions, and the evidence heard during the hearings, provides for more consistent, predictable results in a case.
Final Offer Arbitration – Night Baseball Arbitration
This is a variation on baseball arbitration. The parties establish their demands but do not reveal them to the arbitrator. The demand that is closest to the arbitrator’s decision becomes the binding arbitration award.
**To discuss the approach, ADR process or arbitrator best suited to you and your dispute, please contact us at 1-800-423-7010 today.