Arbitration Offers Court-Free Dispute Resolution

Answer 1

Arbitration is a process that aims to resolve a dispute between at least two parties without assistance from the court system. Some binding agreements stipulate that disputes automatically be settled through arbitration. This generally includes situations such as:

• selling of securities through a stock broker

• buying and selling of property

• purchase of a new car

• opening a bank account

In efforts ton control rising litigation costs, many businesses are turning to arbitration to settle legal disputes. Some companies even have their own rules for resolution of disputes. Increasingly the results of arbitration are considered to be legally binding in a matter. Another option is for arbitration to be the first step in solving a resolution.

The Federal Arbitration Act of the 1920s and later the Uniform Arbitration Act of 1955 helped make arbitration a widespread practice throughout the United States. While arbitration is a way to avoid the court system, the courts have in fact enforced arbitration contracts and agreements as being legally binding.

Why arbitrate? While there are some situations where the parties involved have no choice but to use arbitration to settle a dispute, there are some general reasons why arbitration can be a beneficial way to settle a dispute.

• less expense involved than typical court-based resolutions

• generally yield a faster result

• results are considered to be more favorable to both parties since those making the decision tend to be knowledgeable in the issues at hand

• arbitration disputes are private, as opposed to court proceedings which are usually public record

The Revised Uniform Arbitration Act of 1962 allows the parties involved to amend requirements involved with the arbitration. Parties may agree to allow more or less discovery. The provisions of arbitration are generally flexible if all parties are in agreement, but can not be in violation of existing laws.

It is important to realize that any award made in arbitration is usually very hard to overturn, unless it is in clear violation of the law. Before signing a contract or agreeing to settle a dispute with arbitration it is vital that all parties involved know what the terms of arbitration will be in the event of a dispute. Generally arbitration is a less expensive and more flexible and overall more agreeable way to settle a dispute. Just remember that the end results are difficult to alter.