Q: What is Arbitration?

Arbitration is a private adjudication process. Generally, parties make an agreement either before or after a dispute exists to engage and use an impartial third party to provide a final and binding decision with regard to any dispute between the parties. It is characterized by party choice and participation in the designing and customization of the process to suit their situation. Parties generally participate in the joint selection and payment of the arbitrator. Parties can identify a mutually acceptable arbitrator or specify the procedure for the selection of an arbitrator and the specific experience, background and skills desired in the arbitrator to be selected.

Arbitration is widely utilized in a broad range of circumstances and contexts and enjoys exceptionally strong support by American court decisions. A general goal of arbitration is to achieve fair, just and appropriate resolutions to disputes with speed, efficiency and economy. Some of the desired hallmarks of arbitration include party selection of their decision maker, a private forum, less formality, a process unburdened by legalistic rules and procedures and a process more easily understood by persons without requiring formal legal training or education.

Arbitration is an increasingly popular method for the resolution of a wide range of disputes. When cases involve complex legal, technical, professional and insurance issues, multiple parties and valuable ongoing and sensitive relationships, the resolution of such disputes through the judicial system can be complicated, costly and slow. Often, the cost of adjudicating disputes can exceed the value of the issues involved.

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The new Arbitration Act resolves and answers many issues that existed under the old Arbitration statute. But, the new Act makes the arbitration process more like litigation with potentially costly full discovery and additional appeal opportunities and expanded appeal grounds.