Legal Answers
Brien Roche
Many contracts have required arbitration clauses within them. This requires the parties to arbitrate any dispute that arises out of the contract. Therefore before you sign such a contract you should understand the differences between arbitrating as opposed to filing a lawsuit.
Most arbitrations are conducted by a single arbitrator. That person is either appointed under the terms of the contract or is agreed to by the parties. That person is paid a fee. That fee may be high. It may be more than the legal fees you incur in arbitrating. The largest arbitration association in the United States is the American Arbitration Association. They have a very defined set of rules. Also they have a number of approved arbitrators that the parties can agree on.
The reason that arbitration clauses appear in contracts is because most businesses do not want disputes with consumers tried in the courtroom. In other words they don’t want to face a local jury. They would prefer to have the case decided by an arbitrator. This removes from the case the unknown that exist with a jury. A jury has a great deal of discretion. A jury is an unknown.
Arbitrations are touted as being less expensive than court trials. That is not always the case. Sometimes the fees paid to the arbitrator can equal or exceed the legal fees of the lawyers. As such, you need to think long and hard before signing a contract that requires arbitration. Likewise you need to think long and hard before agreeing to arbitration.
Some arbitration clauses may not be enforceable.
See Brien Roche’s book Law 101 published by Sphinx Publishing for more information on this subject.
Legal answers provided by Brien Roche, a personal injury attorney with over 40 years of trial experience. Also Contact Us today to discuss your personal injury matter.
For more information on arbitration see the pages on Wikipedia.
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