What is Arbitration?
Areas of Arbitration
Contact Person: A. Eric Johnston
What is Arbitration?
Like mediation, arbitration is also an Alternative Dispute Resolution Process (ADR). However, it replaces the actual trial, whether by jury or judge, with a process resulting in a final and binding decision. It is described by the Alabama State Bar as follows:
"Arbitration is a private, adversarial, fact-finding process, whereby disputes are resolved in accordance with a contract between the parties. The attorneys present their respective evidence and arguments to an arbitrator (or panel of arbitrators) who later issues a written decision called an "award." The arbitrator's award will not establish legal precedent or principle. Pre-hearing discovery tends to be limited and may be denied entirely. Arbitration is generally binding, and the basis for appealing awards are few and narrow. Arbitration awards are ultimately enforceable by court order.
Written agreements to arbitrate future disputes in contracts which involve interstate commerce may be enforceable in accordance with the Federal Arbitration Act (FAA). Written agreements to arbitrate existing disputes may be enforceable in accordance with Alabama law and the FAA. The FAA is enforceable in State and Federal courts.
Parties can tailor arbitration to their own needs; for example, they may agree to combine arbitration with another ADR process such as mediation (mediation/arbitration or Med/Arb.), or may elect advisory arbitration. Even without a pre-existing contract to arbitrate, parties in litigation can agree to use arbitration, stipulating whether the decision will be binding or non-binding."
Arbitration is less frequently used than mediation. That is due to the reason that it is binding. This sometimes frightens aggrieved persons, because they believe they are entitled to "their day in court". The arbitration process does entitle them to "their day in court", but it usually allows the dispute to be resolved on a less expensive and more expeditious basis.
Arbitration is applicable to all private civil litigation. It is not used in making decisions in criminal cases or in most cases involving the government. However, it is very helpful in contractual, construction and other business related disputes. It is very important and essential to the dispute resolution process for churches, religious organizations and religious persons who do not believe it appropriate to be litigating with each other.
An arbitration can be done by one or more arbitrators. Often, an arbitration panel consists of three persons. The number of arbitrators usually is determined by the size and complexity of the case.
For more information about the arbitration process, please contact us. Arbitration is a unique and beneficial way to resolve your disputes.
The fees for arbitration must usually be negotiated based on the number of parties in a case, its complexity, the number of witnesses, and other factors which determine length of a proceeding, whether it is a trial or an arbitration. Keep in mind that an arbitration replaces a trial. It involves witnesses, findings of fact, and consideration of the issues, resulting in a final decision.
Hourly rates may not necessarily apply and the rates may be charged on a daily basis. Also, rates depend on the number of arbitrators to be used, whether one, or a panel of more than one. A single arbitrator is often able to resolve all but the most complex disputes. A panel of three (3) arbitrators is frequently used, while more than that is sometimes used, but not often. A common process for selecting arbitrators is for each party to a dispute to select an arbitrator, with those thereby selected to select and additional arbitrator. All arbitrators would be objective and have no interest in the matter or relationship with any of the parties.
Unless otherwise agreed, our office would usually only provide one (1) arbitrator if there is to be a panel. The fees for the panel of arbitrators will then be negotiated.
If our office is to provide the sole arbitrator, the fee schedule will be as follows:
· $200.00 per hour Up to four (4) parties as separately identified in a lawsuit or claim; except, husband and wife or parties represented by the same lawyer who have mutual interests.
· $ 25.00 per hour For each additional party not to exceed a maximum of $300.00 per hour total for any arbitration.
· Out of Office Arbitrations Ten percent (10%) additional charge will be added for all out of office arbitrations.
· Expenses In office arbitrations: normal expenses, such as meals are included. Extraordinary expenses shall be paid by agreement.
Out of office arbitrations: travel time, if applicable, shall be at the rate of $100.00 per hour. Extended travel time will be negotiated. Travel expenses shall be at the current I.R.S. mileage rate, actual airfare or other travel charges, plus actual expenses, viz., meals, lodging, etcetera.
· Unless otherwise agreed, arbitration fees will be equally paid by each party or interest. The parties may mutually agree for a variation of this which may include the losing party paying arbitration fees.
· A deposit of $250.00 per side per day times the projected number of days the arbitration may last is required 24 hours prior to the day of arbitration. Refunds may be made at the discretion of the arbitrator or based on extenuating circumstances.
We wish to offer as flexible a fee schedule as possible.
We are concerned for particular needs and we know there are myriad
circumstances which may require different arrangements.
In addition to the explanation above about the necessity to negotiation
arbitration fees, we will also consider unusual, hardship and other appropriate
circumstances in determining arbitration fees.
 Alabama Center for Dispute Resolution: Alternative Dispute Resolution Procedures in Alabama With Mediation Model - 2nd Edition, 1998.