Arbitration

“The submission for determination of disputed matter to private unofficial persons selected in manner provided by law or agreement… [It] presupposes a controversy or a difference to be tried and decided” (Black’s Law Dictionary). “An out-of-court procedure for resolving disputes in which one or more people — the arbitrator(s) — hear evidence and make a decision. Arbitration is like a trial in some ways, but typically proceeds much more quickly and with less formality” (Nolo’s Law Dictionary). “An alternative dispute resolution method with one or more persons hearing a dispute and rendering a binding decision.  An agreement to arbitrate disputes can be made before or after a specific dispute arises.  Since the parties can agree to the rules of arbitration (e.g., selecting qualified arbitrators with knowledge of the issues), they can save costs as compared to litigation” (Cornell University Law School).

Example Sentence

Instead of going to court to settle the payment of medical expenses, the two parties went to arbitration.

Case Study

Because Andrew did not want to deal with the lengthy process of taking his accident case to court, he decided to use arbitration. He knew that he might not get as much money, but did not want the problem to drag on for years because of the defiance of his insurance company.

Other Important Information

There are two types of arbitration:

  1. Compulsory arbitration – “occurs when the consent of one of the parties is enforced by statutory provisions”
  2. Voluntary arbitration – “mutual and free consent of the parties” (Black’s Law Dictionary).

Because of the finality of arbitration, people considering arbitration should also consider hiring a lawyer to ensure that they get full compensation possible. Arbitration is typically faster, but also is limited in the amount of money that can be awarded (no more than $50,000 in addition to any PIP benefits or property damage claims) (31A-22-321(2)a). Utah law specifies that the two parties will choose the arbitrator to resolve their dispute. If they cannot agree upon one, then they may each choose one and those two arbitrators will pick a third (31A-22-321-6). Each party also agrees to pay an equal amount of the costs for using a(n) arbitrator(s) (31A-22-321-7). The specifics of what the arbitrator will do is outlined in 78B-11-116.

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