Arbitration In California: What To Know?

PublishedJanuary 1, 1970

What Is Arbitration?

Arbitration is a form of alternative dispute resolution (ADR). In arbitration, parties submit a dispute to a neutral third party, an arbitrator. The arbitrator makes a decision, which is often binding. Unlike litigation, arbitration is characterized by:

  • Less formality
  • Confidentiality
  • Speed

The process can be conducted online, in private, and without the need to follow the rules of evidence in a court of law. At KAASS LAW, arbitration is one of our core practices.

When Does Arbitration Apply?

Arbitration applies when:

  • There is an arbitration agreement between the parties
  • The contract contains a binding arbitration clause
  • The parties voluntarily choose arbitration in the course of a dispute

However, arbitration is most commonly used in:

  • Commercial contracts
  • Labor relations
  • Consumer and service provider disputes
  • International transactions

For example, when an employee signs an employment contract that states arbitration will resolve any disputes, the employee gives up the right to go to court. As the National Employment Law Project points out, more than 60 million employees in the U.S. are bound by binding arbitration agreements. This means that a significant portion of employment disputes do not make it to court, but are handled through closed arbitration proceedings. At KAASS LAW, we carefully analyze the arbitration provisions in our clients' contracts and provide legal support. Read more about us on our services page.

How Does It Work?

The arbitration process can vary depending on the specific arbitration agreement and the organization that administers the process. However, common steps include:

  • Initiation - one party files a request for arbitration
  • Selection of an arbitrator - the parties jointly select one or more arbitrators
  • Preparation - the parties submit documents, evidence and testimony
  • Hearing - the arbitrator hears the parties' arguments and may ask questions
  • Decision - the arbitrator makes a final decision that is enforceable

Arbitrators' decisions are recognized and enforced by the courts, making arbitration a powerful tool. However, it should be kept in mind that the possibilities of appeal are limited. Our lawyers have extensive experience in representing clients in all stages of arbitration proceedings.

Advantages of Arbitration

Arbitration has several important advantages:

  • Speed. A decision can be made within a few months
  • Confidentiality. Hearings are held in private
  • Conservation of resources. With the right strategy, costs can be lower than in court
  • Specialization of arbitrators. In complex cases, the parties can select an arbitrator with relevant expertise
  • Minimization of hostility. Arbitration is more informal, which reduces the intensity of the conflict

Disadvantages of Arbitration

Despite its advantages, arbitration has its disadvantages:

  • Limited appeal. Even if there is an error by the arbitrator, there can be no review unless there are special grounds
  • High costs. The services of professional arbitrators are often expensive
  • Potential bias. In consumer and employment arbitration, arbitrators may be loyal to the companies that are often their clients

That's why it's important to have competent representation.

Who Does Arbitration?

Lawyers who specialize in dispute resolution and contract law conduct arbitration. Their work includes:

  • Analyzing contracts for arbitration provisions
  • Advising clients on dispute resolution strategies
  • Preparing pleadings and exhibits
  • Attending hearings
  • Defending the client before the arbitrator
  • Enforcement of the arbitral award in court

KAASS LAW attorneys have decades of experience and a deep understanding of both the federal and California legal nuances of the process. We represent both corporate clients and individuals in arbitration disputes. According to the American Arbitration Association (AAA), a professional arbitration lawyer must be able to:

  • Strategically assess risk
  • Manage the evidentiary record
  • Communicate effectively with the arbitrators

In addition, JAMS provides a detailed definition of arbitration and an explanation of the standards followed by arbitrators in the United States.

Why It Is Important to Seek Legal Counsel?

Arbitration may seem more informal than litigation, but that doesn't make it easy. Even if the case seems winnable at first, factors such as:

  • Mistakes in the documents
  • Missed deadlines for submitting evidence
  • Weak legal arguments

Can result in a loss, so the assistance of a qualified attorney is essential. KAASS LAW not only has an extensive practice, but also strategically builds a defense.

Conclusion

Arbitration is a powerful tool for those who want to avoid protracted litigation and reach a resolution quickly and confidentially. However, arbitration requires:

  • A thorough understanding of the process
  • The ability to work with institutions
  • The right choice of strategy

This is why the assistance of qualified counsel is critical. Our firm provides comprehensive services, including:

  • Contract analysis
  • Strategic support
  • Trial advocacy

If you have a dispute that is subject to arbitration or would like to include an arbitration clause in a contract, contact us. Call 844-522-7752 for a free consultation.