Arbitration provides a private, judicial-like determination of a dispute, by an independent third party known as an Arbitrator. It is a method of resolving disputes in which the disputing parties agree (in advance) to comply with the decision of the Arbitrator. The Arbitrator receives his or her mandate and powers from an Arbitration Agreement, which is a legal contract that sets out the questions/issues to decide.
The decision of an Arbitrator is known as the “Award.” Arbitral awards are binding on the parties and are enforceable in court. To be enforceable, a family arbitral award must conform and comply with strict rules set out in governing statutes.
Arbitrations are much more formal than mediations. They are in effect legal proceedings where the Arbitrator is like a judge. As litigation, Arbitration utilizes an adversarial approach. However, unlike litigation, Arbitration generally allows the participants to design most aspects of the process to suit their needs and the nature of the dispute. Further, the parties are able to choose the Arbitrator, an option not available within the court system.
Advantages Of Arbitration
Choice of Decision Maker – The parties choose a person specifically trained and experienced in the area of the dispute.
Efficiency – Arbitrations are usually heard sooner than court proceedings and usually shorter in length.
Privacy – Arbitration hearings are confidential, private meetings.
Convenience – Hearings are arranged at mutually agreed upon times and places.
Flexibility – The procedures fit the case and the circumstances.
Finality – Decisions are final and binding and only subject to narrow rights of appeal.
Cost – Although the parties have to pay for the Arbitrator’s services, because the procedure is streamlined, it is much more cost efficient than a trial.