As threatened, today we're going to take a more detailed look at arbitration if, for no other reason, than because I think most of you still don't believe me that this does or could apply to you.
Like I said yesterday, you might have signed one or a dozen agreements that requires you to arbitrate. If so, you can rest soundly with the idea that, yes, you can give up your right to sue or be sued in a court of law and, instead, have your matter heard in arbitration. I know that there is a fundamental right of access to courts in this state, but you can give up that right when you sign your appliance service plan or what have you.
If you have such an agreement, you are quite possibly going to have your arbitration heard by the American Arbitration Association, although there are some other organizations out there that handle special subject areas. The procedures and even the number of arbitrators used will depend upon the amount of money in dispute.
There are some distinct benefits to this. If you have a dispute over an amount less than $75,000, you will be put on the "expedited" track for resolution. Under this system, your matter is expected to go to final hearing (the rough equivalent of a trial) within 30 days. By this method, you should save yourself a lot of time, as well money spent on litigation and legal fees. One negative, you have to pay a larger fee for initiating the arbitration than a lawsuit and you have to pay for the arbitrator's time.
Reality check! In my own experience, I have found that arbitrations on something other than the expedited track are not more cost effective than litigation. Like I just said, you have to pay for the arbitrator- and you have to pay by the hour, just like you do for your lawyer. Also, in litigation you have the right to learn all about your adversary's case in the "discovery" phase, where you get to ask hin/her/it to produce documents, admit or deny the truth of certain statements, answer questions and interrogate witnesses. In arbitration, there are obligations to produce records and documents, but no right to interrogate witnesses or employ any of the other liltigation discovery tools. This is supposed to save money. I find that it allows for playing hide the ball and leads to the filing of motions, arguments and, ultimately, hearings before the arbitrator. This costs money and detracts from the very benefit that arbitration was supposed to secure. It also marries you somewhat to the good faith willingness of your opponent to be forthright and turn over all the information that he/she/it is supposed to turn over.
I'm not blaming the arbitration process entirely for this one. Lawyers - or new lawyers, anyway-need to be trained as early as law school that how you handle an arbitration is very different than how you handle a lawsuit. The "no stone unturned" approach and war by attrition will end up costing you ten times more money in arbitration than it will in litigation and take three times as long to "litigate" before the arbitrator because there simply are no rules or provisions for handling many of the matters that come up in litigation.
Now, you may have no agreement to arbitrate. You may even sue or be sued, proceed on with your lawsuit as if you are going to trial and, then, one day you open up the mail to find that you have been sent by your presiding judge to arbitration. There is a whole other system out there for the handling of arbitrations referred out by judges - and by judges, I mean the ones presiding in our state court system. I'll spare you the details for now, but this system is also designed to render a decision quickly and does not require all the formalities of a full trial or discovery. It's designed to be finished in about 60 days and is based upon the arguments and representations of counsel instead of the live or deposition testimony of witnesses.
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