Arbitration Overview

Private and Binding:

Arbitration is a private process that results in a binding decision, called an award. Arbitration is primarily used in business and commercial disputes, and also in family matters.  Arbitration is not generally a venue for criminal cases.  Parties may agree on many aspects of arbitration either ahead of time by including an arbitration clause in a contract, or at the time a dispute arises, or a court may appoint an arbitrator to hear a case.  Agreements about how arbitration is conducted includes what forum will administer the claim, what qualifications the arbitrator should have, where the hearing is conducted, what type of hearing, whether the award should be fully supported (a reasoned award) or a simple award, and other procedural matters. Many arbitrators are selected based on their expert knowledge and experience within an industry; others are chosen for their understanding of the legal process, such as former administrative law judges or seasoned, reputable attorneys.

Arbitrator's Role:

An arbitrator is a private judge; a finder of fact in a hearing of equity. It is common to have either a single arbitrator for smaller claim amounts, or a panel of three (3) arbitrators for larger claim amounts. The arbitrator must be neutral in the dispute and disclose any and all conflicts or potential conflicts of interest. Parties may not contact or communicate with the arbitrator outside the presence of all parties to the dispute. Private communications, called ex parte communications, are forbidden to preserve neutrality and ensure fairness of the process. For this reason, claimants must choose a forum to administrator the case, rather than contacting an arbitrator directly. United States Arbitration Association's (USADR) case administrator can be contacted via email or by phone 303-864-9674.

Rules of Procedure:

The Arbitration Process is governed by rules of procedure published by Dispute Resolution Forums or Tribunals. When a contract provides that any disputes will be settled by binding arbitration using specific rules of procedure, the arbitrator conducts the case according to the time frames, document and exhibit provisions, hearing parameters, etc. noted in the rules. The parties may jointly agree to utilize USADR's administrative services rather than the forum specified in the contractual arbitration provision.  By joint agreement, the arbitrators may conduct the arbitration utilizing the rules specified in the contract, or that the parties unanimously agree to.  ♦More about Rules

Size of Claim Determines Procedure:

USADR’s rules provide that smaller claims have a less formal hearing than larger claims in order to provide reduced cost and compressed time frames for the benefit of the parties.  Small Claims ($14,999 or  less) have a flat fee and are decided on the written evidence submitted.  Expedited Claims ($15,000 - $74,999)  have an administrative fee and a flat hearing fee if conducted in four (4) hours or under. Large Claims ($75,000 and over) consist of one or more pre-hearing teleconferences followed by a hearing attended by the parties and their attorneys, when represented.  The necessary hearing time is determined by the parties. ♦More about Types of Hearings