However, if the tribunal has not conducted itself properly, has answered questions it should not have answered or, in some cases, made an error of law, a party can go to court to ask for the award to be set aside or sent back to the tribunal to make its decision properly.
One of the main attractions of arbitration is that awards can typically be enforced in most countries worldwide without a rehearing of the issues and after following a relatively short process. The realities of enforcement vary depending on such factors as:. If cash in the bank is important, the prospects of enforcement should be considered at the outset of any dispute. A groundbreaking after the event ATE insurance facility for our commercial disputes clients.
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Email your enquiry Contact details. What is arbitration? The arbitration agreement The arbitration agreement will determine key elements of the process. For example: Will the tribunal comprise one person or three? How will the arbitrators be selected?
How is an arbitration started? What happens next? The tribunal must be formally constituted — i f there are to be three arbitrators in a two party dispute, each party will typically select one arbitrator. The nominees or the arbitral institution will select a third arbitrator to act as chair. The issues for determination must be identified — these can be issues of fact, law or quantum.
The process and timetable must be decided — these will be worked out between the parties and the tribunal. Both should be designed to fit the requirements of the particular dispute. Conduct of the arbitration The arbitration will then proceed in accordance with the procedure that has been adopted. The award After the hearing, the tribunal will produce its award.
Enforcement One of the main attractions of arbitration is that awards can typically be enforced in most countries worldwide without a rehearing of the issues and after following a relatively short process.
Unlike trials, which must be worked into overcrowded court calendars, arbitration hearings can usually be scheduled around the needs and availabilities of those involved, including weekends and evenings. Simplified rules of evidence and procedure. The often convoluted rules of evidence and procedure do not apply in arbitration proceedings -- making them less stilted and more easily adapted to the needs of those involved.
Importantly, arbitration dispenses with the procedure called discovery that involves taking and answering interrogatories, depositions, and requests to produce documents -- often derided as a delaying and game-playing tactic of litigation.
In arbitrations, most matters, such as who will be called as a witness and what documents must be produced, are handled with a simple phone call. Arbitration proceedings are generally held in private. And parties sometimes agree to keep the proceedings and terms of the final resolution confidential.
Both of these safeguards can be a boon if the subject matter of the dispute might cause some embarrassment or reveal private information, such as a company's client list. Being aware of the possible drawbacks of arbitration will help you make an informed decision about whether to enter or remain in a consumer transaction that mandates it -- or whether to choose it as a resolution technique if a dispute arises.
Limited recourse. A final decision is hard to shake. If the arbitrator's award is unfair or illogical, a consumer may well be stuck with it and barred forever from airing the underlying claim in court.
Uneven playing field. Some are concerned that the "take-it-or-leave-it" nature of many arbitration clauses work in favor of a large employer or manufacturer when challenged by an employee or consumer who has shallower pockets and less power.
Most retailers -- car dealers are repeat offenders here -- do not mention the arbitration clause before requiring the customer to sign the purchase agreement. Or they will wait until you are ready to drive the car off the lot, then casually mention that they won't sell unless you sign.
Questionable objectivity. Another concern is that the process of choosing an arbitrator is not an objective one, particularly when the decision-maker is picked by an agency from a pool list, where those who become favorites may get assigned cases more often. Adding possible complication: Many of the national arbitration groups actively market their services to companies that issue credit cards or sell goods to consumers, casting additional questions on the alleged neutral's objectivity.
And an arbitrator chosen by a party within an industry may be less objective, more likely to be biased in favor of the appointing group. Lack of transparency. As mentioned, the fact that arbitration hearings are generally held in private rather than in an open courtroom, and decisions are usually not publicly accessible, is considered a benefit by some people in some situations.
Others, however, lament that this lack of transparency makes the process more likely to be tainted or biased, which is especially troublesome because arbitration decisions are so infrequently reviewed by the courts. Rising costs. While most still claim that arbitration is less costly than litigation, its costs are increasing. Add to that the arbitrator's fees -- multiplied by three if a panel is involved -- in addition to administrative costs, and the process appears to be less of a bargain.
Given the possible perils and unevenness for those who unwittingly enter arbitration contracts, the wise consumer can take a number of steps to become better informed and, possibly, ward off a bad experience.
The dispute will normally be resolved much sooner, as a date for the arbitration can usually be obtained a lot faster than a court date. In Virginia, a trial date is normally about twelve months from the date the lawsuit is filed.
Arbitration is usually a lot less expensive. Partly that is because the fee paid the arbitrator is a lot less than the expense of paying expert witnesses to come and testify at trial. There are also lower costs in preparing for the arbitration than there are in for preparing for a trial. Partly this is due to the fact that the rules of evidence are often more relaxed than in a trial, so that documents can be submitted in lieu of having a witness come to trial and testify.
For instance, if a claimant has several doctors who are out-of-state, the cost of bringing them to trial or going out-of-state to take their depositions may be prohibitive for trial, but in arbitration you can usually use just their records and reports.
Unlike a trial, arbitration is essentially a private procedure, so that if the parties desire privacy then the dispute and the resolution can be kept confidential.
If arbitration is binding, there are very limited opportunities for either side to appeal, so the arbitration will be the end of the dispute. That gives finality to the arbitration award that is not often present with a trial decision. Disadvantages of Arbitration There are, however, also some disadvantages to arbitration as a method of resolving a dispute. If arbitration is binding, both sides give up their right to an appeal. That means there is no real opportunity to correct what one party may feel is an erroneous arbitration decision.
It may be cheaper to try the case before a judge in General District Court, where medical evidence can be presented by affidavits instead of paying the doctor to testify. Rules of evidence may prevent some evidence from being considered by a judge or a jury, but an arbitrator may consider that evidence.
If certain information from a witness is presented by documents, then there is no opportunity to cross-examine the testimony of that witness.
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