What is Arbitration and is it Right for my Case?

Arbitration is a form of alternative dispute resolution.  Instead of litigating in court, parties submit the claim to an independent third party (an “arbitrator”) who acts as judge and decides the outcome of the case.  There are advantages and disadvantages to arbitration.  Your attorney can help you decide if arbitration is appropriate for your case and, if so, when.  There are also many different ways an arbitration can be structured.  If arbitration is appropriate for your case, your attorney can help negotiate the best type of arbitration for your case.

Arbitration involves submitting information to the arbitrator to help him decide the case.  Sometimes the case is just submitted “on paper”; that is, each side submits a written summary and arguments, along with other documents, and the arbitrator decides the case based only on these written materials.  Other times there is a formal presentation in person, with each side arguing their side orally, and submitting documents to support their position.  And other times the format is more like a “mini-trial”, with the parties and other witnesses testifying.  In this format, witnesses are sworn to give truthful testimony and then are questioned and cross-examined by the attorneys. The attorneys make oral arguments on behalf of their clients, just as if they were in court, but the setting is typically a law firm conference room and the atmosphere is more  casual than in a courtroom.  There is no jury, no judge, and no court reporter; just the parties, their attorneys, and the arbitrator.

After the submission or hearing, the arbitrator usually writes a letter to the parties giving his or her decision, often with a brief explanation.  This concludes the matter without the stress and unpredictability of presenting your case to a jury in court.

There are a number of advantages and disadvantages inherent in the arbitration process.  Whether it is right for your case is a question for you and your attorney, but below are some general pros and cons to consider.

Advantages to Arbitration:

  1. EXPENSE: Arbitration is relatively inexpensive compared to the cost of trying a case in court.  The parties split the arbitrator’s fee, but that is often cheaper than paying expert witnesses and doctors to testify at trial.  Because the attorneys often agree that the formal rules of evidence do not apply in arbitration, doctors and expert witnesses can submit written reports rather than appearing in person.  Arbitration can save a claimant thousands of dollars in appearance fees for experts alone.
  2. TIME: Cases are often resolved much sooner in arbitration than in litigation.  In Virginia, it usually takes ten to fourteen months to get a trial date after suit is filed.
  3. CONVENIENCE: Arbitrations can be scheduled any time the parties and arbitrator agree to do so, even on evenings or weekends if necessary.  The parties and arbitrator can also agree on any location, while lawsuits can normally be filed only in certain jurisdictions.
  4. CONFIDENTIALITY: Unlike the courtroom, where proceedings are public, arbitration is a private, confidential process.  Details about your case, including the result, will be normally be kept confidential between the parties, the attorneys, and the arbitrator.
  5. IMPARTIALITY: Since the parties collaborate to select the arbitrator, he or she is likely to be more fair and impartial than a jury that has been randomly selected from the population.  Since the arbitrator is usually an experienced attorney or a retired judge, the arbitrator is likely to give a result that is more consistent with the normal result in the type of case presented.  An individual jury has no experience with what juries “normally” do in a particular case, so the results can vary more widely.

Disadvantages to Arbitration:

  1. NO APPEAL: Arbitration is binding on the parties and can almost never be appealed absent a finding of gross misconduct on the part of the arbitrator.  The parties have to accept the decision of the arbitrator as final, whereas in court, there is a right to appeal.
  2. NO DISCOVERY: Discovery is the process by which parties are compelled to turn over documents and evidence to the other side.  Litigation has a formal discovery process.  In arbitration, if it is done prior to litigation, there is no right to discovery, and this can lead to premature resolutions without all the facts being known.
  3. NO RULES OF EVIDENCE: Although the relaxation of the rules of evidence can save parties money, it also means that the arbitrator can make his decision using evidence that would otherwise be inadmissible in a court of law.  The relaxed rules of evidence also may mean there is a limited right to cross-examine opposing witnesses that submit written reports rather than attending the arbitration in person.

The decision whether to arbitrate your case, and how best to structure the arbitration and when it should take place, and even who the arbitrator should be, can be a complex process and depends largely on the individual circumstances of a particular case. For example, if an injured claimant has moved while he was receiving medical treatment, so that his doctors are in several different states, then the cost of bringing their testimony to trial versus being able to submit their opinions in documents may make arbitration a better, more economical choice.  On the other hand, if there is harmful information in medical records that would not be admissible in court, but would be considered by an arbitrator, then a trial may be more likely to result in a favorable outcome than an arbitration. Lastly, although it may seem that a smaller case would be more suitable to arbitration due to the lower expenses, in fact since cases worth $25,000 or less can be filed in Virginia General District Court where written affidavits from doctors can be used instead of actual testimony in court, the arbitrator’s fee may actually make arbitration more expensive. .  At Allen and Allen, the attorneys are experienced in the use of alternate dispute resolution methods like arbitration, and will advise you if and when, and under what structure, arbitration is appropriate for your case.

About Scott D. Fitzgerald: Scott Fitzgerald is the great grandson of the Allen & Allen’s founder, George E. Allen, Sr., and is the fourth generation of the Allen family to join the Allen Law Firm. He is a Richmond personal injury attorney focusing his practice on motorcycle crash cases,  truck accident cases and car accident in Richmond, VA area.  Scott is dedicated to protecting the best interests of his clients and defending their rights against insurance companies.