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What is Arbitration?

Alternative Dispute Resolution By Binnall Law Group - 2021/04/16 at 07:11pm

Seek Guidance from an Alexandria Business Litigation Attorney

If you’re involved in a contract dispute, then it’s possible that your contract includes an arbitration clause that imposes arbitration on you (or that — at the very least — gives you a choice as to whether to go through arbitration).

Arbitration is a form of alternative dispute resolution.  Through arbitration, the parties are given an opportunity to present their evidence and their arguments to a neutral arbitrator, who will evaluate the facts and come to a decision.

Arbitration is meant to be somewhat less formal than a courtroom hearing/trial.  It is more efficient and less costly, too.  This may be preferable for some parties.  However, arbitration is not always a positive option.  Generally speaking, institutional parties (i.e., powerful entities, such as large corporations) have an advantage in arbitration.  As such, you will want an Alexandria business litigation attorney to evaluate whether you actually have to go through arbitration.

Types of Arbitration

There are several different types of arbitration — each will impact the resolution of your case in different ways.  Depending on the terms of your contract, and the arbitration clause within said contract, you may be subject to a specific type of arbitration.

Consider the following:

Mandatory vs. Voluntary

Arbitration may be mandatory or voluntary.

Voluntary arbitration allows a party to refuse to go through the arbitration process.  This may be preferable if the party feels that they will have a better opportunity to effectuate their arguments in a courtroom setting (i.e., they are concerned that the arbitrator will not be neutral or believe that their arguments will be better received by a judge).

By contrast, mandatory arbitration requires the parties to go through the arbitration process.  In many contracts, mandatory arbitration is imposed to avoid the excessive costs and hassle of trial litigation.

Binding vs. Nonbinding Arbitration

Arbitration may be binding or nonbinding.

Binding arbitration essentially makes the decision of the arbitrator the final judgment.  The court must accept the decision made by the arbitrator and effectuate it.  This puts a great deal of pressure on the parties to secure a favorable outcome during arbitration.

By contrast, nonbinding arbitration gives the parties the opportunity to reject the decision made by the arbitrator and pursue trial litigation instead.  Parties may be interested in going through the arbitration process even if it is nonbinding — this gives them an “independent,” neutral assessment of the case that they can accept or not, depending on if the result is reasonable to each side.

Work with an Alexandria Business Litigation Attorney Today

Binnall Law Group is a boutique commercial litigation firm based out of Alexandria, VA and representing clients throughout the DC metro region.

We are fierce advocates for our clients and are committed to providing comprehensive representation at every stage of litigation.  It is our belief that by having a trial-ready approach from the beginning of representation, we can exercise significant leverage — this empowers us to negotiate favorable outcomes early on.

If you would like to speak to an experienced Alexandria business litigation attorney at our firm, we encourage you to call us at (703) 888-1943 or send us a message online to request a consultation at your earliest convenience.