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Arbitrator Overview

Arbitrator Overview What is an arbitrator?
An arbitrator is neutral individual brought in to help negotiate an agreement between parties in what is known as arbitration.  An arbitrator is not court appointed and the parties themselves are the ones who choose the arbitrator.  Arbitrators are used in civil matters, especially contract disputes and depending on the specifics their decision can be either binding or non-binding.

What are the qualifications for being an arbitrator?

The American Arbitration Association keeps a current roster of Arbitrators and lists a number of qualifications that an individual must meet in order to be an arbitrator.  These qualifications include:

·         Minimum of 10 years of senior level business or professional experience or legal practice

·         Educational degree or professional license in the field of expertise

·         Training or experience in arbitration and forms of dispute resolution

·         Membership in a professional association

·         Other criteria

Are there rules that an arbitrator must follow?

Even though an arbitrator is free to make his/her own determinations about disputes there are essential rules that an arbitrator must follow.  Most importantly is neutrality.  An arbitrator must have no bias or prejudice towards any party or matter involved and is capable of applying standard principles to the matter at hand.   The arbitrator must also be capable of managing the hearing process as well as making an impartial evaluation of evidence. 

Why would I want an arbitrator?

There are numerous reasons why parties on the track of litigation may want an arbitrator make a decision in lieu of court intervention.  One of the most compelling reasons is the cost.  Court costs, attorney's fees, and judgment awards can easily add up to the tens of thousands of dollars.  In contrast, arbitration, although costly, is comparatively inexpensive.  The cost of an arbitrator can often be between $1,000 and $2,000 per day.  Arbitration, in general, will last than $10,000 on average, and that cost will be split between the parties involved.

Another reason to get an arbitrator is that arbitration is considerably less time consuming than litigation.  Litigation can last for months, if not years, when you factor in pre-trial, trial, appeals, etc.  In contrast, arbitration will consist of 3 to 4 days on average.

Other reasons for picking an arbitrator are that arbitration is not a public issue and the exclusionary rules of evidence do not apply.  Because many potential litigants do not wish to have their "dirty laundry" brought into the public eye they might choose arbitration instead.  Arbitration is a private matter with no public record.  The arbitrator is sworn to uphold confidentiality.  For this reason, many corporations require mandatory arbitration so that these issues are not brought into the public eye.  Arbitration is also considered a "free for all." The exclusionary rules of evidence are not applicable as are the rules of civil procedure.  Depending on the evidence this may be a positive or negative aspect of arbitration, depending on who holds damning evidence that would be considered inadmissible in a court of law.

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