Arbitration

1.   Q.     What is the difference between binding and non-binding Arbitration?

      A.    In binding Arbitration, a neutral third party, referred to as the Arbitrator, conducts a hearing (or an informal trial) between the disputing parties and makes a decision that the parties must follow. This is referred to as a binding award. The Arbitrator’s award in binding Arbitration is generally enforceable in court just as a judge’s order would be. 

In non-binding Arbitration a hearing is conducted in the same manner as in binding Arbitration; however, the parties are not required to follow the Arbitrator’s decision. The parties can either jointly agree to follow the Arbitrator’s decision, continue their negotiations and/or go to trial. 

The parties decide by agreement before the Arbitration starts whether they want it to be binding or non-binding.

2.    Q.  What are some of the benefits of Arbitration? 

    A.   In binding Arbitration it is very difficult to overturn the Arbitrator’s decision, so usually it brings finality to the dispute.  Also, Arbitration provides the parties with the opportunity to select a decision maker who is familiar with the subject of the dispute or the area of law.  Arbitration is often quicker than a formal court trial, which makes it less costly. Also, the parties often divide the cost of the Arbitration, so each party only pays one-half of the fee.