After 30 years as commercial litigators doing over 100 arbitrations, we are not big fans of arbitration. It is not necessarily cheaper,and while it is faster, the results are often less than satisfactory, and there is no right to appeal. Unless you previously entered into a mandatory arbitration agreement, then we would suggest non-binding mediation or to stick it out in court. But if you must arbitrate here are some highlights.
Frequently Asked Questions:
Q: So where does the arbitration occur?
A: Most arbitrations are conducted by independent companies like JAMS or the AAA in an office which you will likely have to pay to rent by the hour. These institutions hire independent judges, usually lawyers or business people, who sit and hear your case and render a decision. They are paid about $450 per hour. They will conduct a hearing. Each side will have a chance to tell its story and there will be cross-examination by attorneys. Most cases are handled in the largest city closest to your home. The trial will occur in an office building and not a courthouse. It lasts several days.
Q: Must I use a lawyer?
A: Under the rules of arbitration, you do not need a lawyer. A friend, a family member or an accountant can help you with the trial. Small cases (under $30,000) can effectively be handled without a lawyer, if you have some knowledge of the law involved or the case is clear. If your losses are over $100,000, then you are better off hiring an attorney. Oftentimes presenting the case in the right and sympathetic light is as important as knowing the law. Knowing what makes an arbitrator tick can spell the difference between a good award and a loss.
Q: Where can we represent you for arbitration?
A: We can represent you anywhere and have been in hearings in New York, Seattle, Chicago, Cleveland and Boca Raton. At first, everything will be done on the telephone, but you will need to come to our office to prepare you for trial a few weeks in advance. Many cases are settled right before trial when the lawyers evaluate the case's strengths and weaknesses most thoroughly.
Q: What Happens if I win?
A: Just because you win at arbitration does not mean you can send the Sheriff to collect the money from the loser. You will need to “Confirm” your arbitration award in court. That means you must start a new law suit in court. You must do this within one year of getting the award or you will lose it forever. By and large even the most absurd awards, even ones lacking any rational basis, will get confirmed by the court unless it so offends the public policy of the state. In our years handling arbitrations, we only had two awards overturned by a lower court judge. One of those two was reversed on appeal and reinstated and from the other no appeal was taken.