Arbitration is becoming increasingly common in many different types of contracts as a method to avoid the uncertainty and expense of litigation. However, there are different types of arbitration, and consumers should be aware of what their obligations and responsibilities are regarding these matters.
Alternate Dispute Resolution
Arbitration, one form of ADR, is less formal than a court trial but more formal than mediation. The specifics regarding the arbitration in question are determined by the contract language requiring the necessity of the arbitration in the first place. For instance, arbitration may be binding or non-binding and voluntary or mandatory. The terms of the contract may generally state that disputes arising between the parties are to be resolved according to arbitration rules in the local jurisdiction or the exact form of the arbitration may be specified in the contract. For instance, a collection attorney in New Jersey has seen arbitration clauses that state how the arbitrator or arbitrators are to be selected, the location where the arbitration will be held, and which party shall pay for attorney’s fees. An important consideration regarding arbitration is that although it is designed to resolve a dispute outside the courtroom, attorneys are very much involved in the process.
Similarities and Contrasts to Litigation
Although widely considered a more streamlined process than a trial, arbitration does have much in common with a litigated case. Evidence is introduced, witnesses testify, and a decision will be rendered. However, the manner in which an arbitrator makes his or her decision is quite different than a judge. Initially, in many cases, the respective parties have some input in selecting the arbitrator, who may also be an expert in the field concerning the dispute. Trial judges are most often chosen at random. An arbitrator is free to base the decision on whatever he or she feels is appropriate, unlike a judge who must follow the statutory law and precedential case decisions.
Appealing an Arbitration
Where an arbitration clause calls for mandatory, binding arbitration, it is very difficult to appeal a decision. Under some circumstances, however, a collection attorney in New Jersey may have grounds if the arbitrator was biased or in some manner exceeded his or her authority.
Contact a Collection Attorney in New Jersey for Legal Advice
There are millions of arbitrations conducted each year, and the number continues to increase. Understand the process. Call Snellings Law LLC, a collection attorney in New Jersey, at (973) 265-6100.