Arbitration is a commonly used form of Alternative Dispute Resolution (ADR) that is designed to allow parties in conflict to find lower cost, faster and more efficient option to resolving civil lawsuits. It is considered part of the ADR group of conflict resolution options that can include direct negotiation or mediation as well as some types of facilitated conferences or meetings. It is classed under ADR because it does not use the traditional court system that includes a trial or hearing in front of a judge or a judge and jury.
This ADR process can be used in a wide variety of different types of civil actions. They can include commercial disputes between companies or organisations, contract and labour disputes, debtor and creditor issues, personal injury cases, insurance claims, consumer disputes and, in some areas, arbitrators may even make decisions in family and divorce cases. The specific type of arbitrator and hearing format will vary based on the specific type of hearing and case. In some situations there may be a panel of arbitrators, typically three but there can be more, or in other cases, there will be a single arbitrator that hears the case.
The process is very similar to a judicial hearing and while some are more informal there are also very formal types of arbitrated hearings. Unlike a judicial hearing, the arbitrator is usually an expert in the subject matter or at least has some experience and knowledge of the subject. This is typically not true of a judicial process where the judge hears the case regardless of his or her specific knowledge of the subject matter. The arbitrator will also be more involved in the direct questioning and clarification of information from the parties involved in the dispute than a judge would be.
The arbitration will usually start with the parties swearing an oath that information shared will be truthful and accurate and that they understand that the arbitrator's decision is binding. This means that the parties accept the arbitrator's decision as the final decision in the processes. Generally, the arbitrator will then provide an opening statement that includes confidentiality, rules of civil procedure and evidence (if applicable), as well as the desired outcomes indicated by the parties. In most hearings, the arbitrator can only write awards that are within the desired outcomes as outlined by the parties prior to the commencement of the hearing.
Each party is then given the opportunity to provide an uninterrupted opening statement. This may be made by a legal representative or the individuals themselves. During this time summary information is provided as well as a general overview of the conflict to date. Each party may present the arbitrator with written documentation that supports the information provided in the opening statement. Usually, relevant copies of information are also provided for the other party or parties in the arbitration hearing.
After all, parties provide their opening statement there is a question and answer type of format. If witnesses or experts are being questioned they are included at this point. Usually, witnesses or experts only attend the part of the hearing in which they are directly involved, there are no observers allowed for the rest of the procedure. This can vary based on the agreement of the parties to the hearing. During this time questions can be asked by the arbitrator and all parties in an attempt to develop a complete understanding of the situation.
Each party is then able to provide a summary statement that highlights any previous or new information developed during the hearing. This, like the opening statement, is usually designed to be uninterrupted. After all, parties have had a chance to give a closing statement the arbitrator will adjourn the hearing.
Arbitration awards are written after the hearing and a decision is not rendered immediately. Information cannot be provided to the arbitrator after the hearing is closed unless requested by the arbitrator during the hearing. This prevents any possible bias or ex parte communication that may sway the arbitrator's decision.
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