Arbitration Basics

An arbitration might be called a kind of out-of-court courtroom. The two sides choose an impartial “arbitrator,” who fulfills the roles that an impartial trial judge would otherwise fulfill. There will never be a jury. The arbitrator oversees discovery, hears the evidence at trial, hears the parties’ legal and factual arguments, and then makes a decision that can be enforced by a court.
Arbitrations are designed to be streamlined, rather than exhaustive. Its streamlined discovery process is limited: Each party gets whatever and as much discovery as the arbitrator can be persuaded is important to its claims or defenses.
Much less discovery is needed in arbitration, because arbitrators typically do not want to resolve cases based on sufficiency-of-evidence grounds. Summary judgment is still available if the deficiencies are really glaring, or if the motion rests on legal grounds like a statute of limitations defense or a failure to exhaust administrative remedies.
The arbitrator will often require the parties to request permission to file a dispositive motion and set forth a quick summary, so the arbitrator can decide whether this will really save time and expense, or will simply lead to an expensive trial on paper as often happens in court.
It is important for both sides to understand that arbitration is just a different forum for the decision of a dispute. It does NOT alter substantive law, or create a Wild West forum in which anything goes, or in which basic claims or defenses become unavailable.

  • The claimant’s need to specify what the claims are DOES exist in arbitration. It always astonishes me when claimants file a one-sentence claim seeking $X in damages but do not think they need to give the respondent or the arbitrator a clear—or even a vague—idea of the legal basis for the claim.
  • The claimant’s need to describe the remedies sought. How can the respondent defend without knowing what is at stake? Indeed, how can the arbitrator make an award without any clear idea what is being sought?
  • Statutes of limitations DO apply in arbitration. The Supreme Court of Washington actually recently said they did not , and the State legislature effectively said ”you’ve got to be kidding,” as they raced to overturn the decision.  However, any tolling agreements of the parties should be enforced in arbitration just as they would be in court.
  • Statutory exhaustion requirements DO apply in arbitration, and arbitrators do and ought to dismiss Title VII, ADEA, ADA, and local-law or State-law claims the same as a court would do, if the claimant has not gone through the required procedures with the EEOC or a State or local agency.
  • Agreed exhaustion agreements DO apply in arbitration, such as an agreed effort at mediation or nonbinding arbitration before binding arbitration can occur.

Compared to litigation in court, arbitration is a more flexible way to resolve a dispute. The parties can decide what rules should be applied, how strictly they are to be applied, how much or how little discovery is needed, and who should make the decision on the merits. Assuming the arbitrator’s agreement, motions can be made and opposed by e-mail. The parties can choose where they want the arbitration to take place. They even have the option of having parts of the arbitration hearing at more than one location, in order to make it easier for subpoenas to be enforced and for the arbitrator to hear the testimony of witnesses in person. Witnesses can also be heard by video conference like Skype, or by telephone.
Arbitration is faster than a trial court, because its streamlined procedures usually take only a matter of months between filing a claim to getting the case resolved, and the Federal Arbitration Act and State arbitration laws provide only very limited grounds to challenge the award afterwards. Win, lose, or draw, everyone can usually get on with their lives much more quickly.
My quickest resolution of an arbitration was a commercial case in which I was appointed in the middle of one month, neither side needed discovery, the hearing was a month after I was appointed, and the award was made in the next few weeks. Both sides could get on with their business freed of the distracting dispute.
The choice of arbitrator is crucial. You want to choose someone who has experience, has a practical sense of what is needed to resolve a matter, who is creative, who has an understanding of—and respect for—the needs of both sides, and who has the ability to work effectively with the parties to get the matter resolved as quickly and as inexpensively as possible.  I believe I fit those requirements.
You also want someone who has a strategic sense born of experience, and who can write decisions clearly enough and reasonably enough that the decisions are not just reasonable but can readily be seen by the parties and a reviewing court to have been reasonable. There is no point in spending time and expense in arbitration if the decisions and awards are so sparse or so poorly explained that the parties are spurred to seek to vacate an award, or that a court concludes it should vacate an award.