Arbitration

Arbitration is analogous to a trial but does offer certain advantages.  An arbitrator — or a panel of 3 arbitrators — will hear a case just like a judge and/or jury.  This is about where the similarities end  Unlike a trial, arbitration:

• Outcomes can be binding or non-binding, depending on the preference of the parties
• Is confidential and is not in the public record
• Allows you to choose decision makers who have specific knowledge of the subject matter, such as technical or construction, as opposed to a judge and/or jurors who most likely do not
• Uses relaxed rules of evidence to lower discovery costs
• Scheduling is not at the whim and constraints of a court
• Does not present the same delays (and costs of paying for experts and attorneys to wait) and thus gives a quicker resolution
• Awards which are binding can not be appealed in court (except on very narrow grounds)

Within arbitration, there are numerous options for the parties to employ, such as:

• High-low arbitration, where the parties can limit the award both on the upside and downside
• Last best offer arbitration (also called baseball arbitration), where the arbitrator is forced to choose between the last offer each party made — which encourages parties to make reasonable last offers lest they potentially lose big
• Incentive arbitration, which is non-binding, but penalizes the party (usually with attorneys fees) who rejects the arbitration award if a later ruling does not improve their situation by some pre-specified percentage or amount