Agreement on Arbitration: An Overview
Arbitration is a method of dispute resolution commonly used in commercial settings. It involves the appointment of a neutral third party, an arbitrator, who decides on the outcome of a dispute after hearing the arguments and evidence presented by the parties involved.
In recent years, many companies have started including arbitration clauses in their contracts. These clauses require any disputes to be resolved through arbitration rather than through the courts. This has led to some controversy, with critics arguing that arbitration favors corporations over consumers and employees.
Despite this controversy, the use of arbitration agreements is on the rise. In 2019, for example, the Supreme Court ruled that employers can require employees to sign arbitration agreements as a condition of employment.
If you are considering signing an arbitration agreement, it is important to understand its implications. Here are some key things to keep in mind:
1. Limited rights to appeal
In arbitration, the decision of the arbitrator is typically final. This means that there are limited options for appeal if you are unhappy with the outcome. This can be a disadvantage, especially if the arbitrator`s decision is unfair or unreasonable.
2. Confidentiality
Arbitration proceedings are usually confidential, which can be an advantage if you want to keep the details of your dispute out of the public eye. However, it can also be a disadvantage if you want to share your story with others or if you are concerned about accountability.
3. Limited discovery
In most arbitration proceedings, there is limited discovery. This means that there are fewer opportunities to gather evidence and build a case. This can be a disadvantage, especially if the other party has more resources and is able to present a stronger case.
4. Cost
Arbitration can be less expensive than going to court, but it can still be costly. The parties involved usually have to pay the fees of the arbitrator, as well as their own legal fees. This can be a disadvantage, especially if you are a consumer or employee who cannot afford to pay these costs.
In conclusion, arbitration agreements are becoming more common in the business world. While there are some advantages to arbitration, there are also some disadvantages that should be considered. If you are faced with an arbitration agreement, it is important to carefully evaluate its implications and seek legal advice before signing.