Arbitration is a form of “alternative dispute resolution” (ADR). It is an “alternative” to the public court system. Instead of a publicly appointed judge or jury deciding your case, arbitration is where the parties agree to have a mutually agreed upon private arbitrator hear the evidence and make a decision.
According to the American Bar Association, arbitration is a method of ADR that provides an arbitrator who can make rulings on the situation at hand. You will have to follow the ruling set by the arbitrator once he or she finalizes the case.
How it works
Arbitration involves you and the other party along with an arbitrator who is a neutral, similar to a judge. The arbitrator will oversee the process and listen as you each side present its case. You can still have legal representation during arbitration as you would in court. The arbitrator will hear everything both sides present and make a final ruling. The process is very much like what happens in a courtroom.
There are differences between going to court and using arbitration. With arbitration, the process is not as formal as court, so some evidence rules and pre-trial discovery procedures will not apply. This allows for the arbitrator to move your case along more quickly than a court could, which has the potential to not only save time but money as well. Arbitrators are often experts in the field that is that subject of the dispute. In the construction context, arbitrators are often construction attorneys or other construction industry professionals. Also, most arbitration decisions are binding and not subject to appeal.