frequently asked questions about arbitration

Binding means that the decision is final, and the parties are compelled to abide by the decision written down in the award by the arbitrator. Since there is little or no right to appeal, binding arbitration really means it is over. In litigation, when you win your lawsuit, the other party typically appeals the case, and the process (and the attorneys’ fees) continue.

Yes. If the parties to the dispute agree that they want an expert in the field of construction as their arbitrator, it’s possible for the DMA arbitrator to preside over their hearing using either the DMA Rules & Procedures, or other rules if so specified in the parties agreement. The choice is up to the parties involved.

In mediation, the parties typically sit in separate rooms. The mediator travels back and forth between rooms bringing offers back and forth between the parties. The mediator usually does not have the authority to make recommendations. They just reiterate offers made by each party to the other party of the dispute. Anything decided at the mediation is usually not binding, and the parties are not compelled to abide with their mediation result.

The courts love private arbitration. Why? Because it lessens the burden on their case load. Arbitration takes cases that would otherwise ultimately be on the court’s docket, and have those cases settled privately out of court.

Our courts are overwhelmed. One way the courts have tried to alleviate the workload is to adopt arbitration themselves as a means to streamline their own process. Attorneys like non-binding arbitration because it’s like a ‘test run’ trial. The attorneys often see how the other side will put on their entire case, and they get an idea how the arbitrator receives the evidence, so they can make appropriate changes before the trial. The parties often need to put on their best case in the arbitration, because the judge tends to agree by the arbitrator’s findings, and the loser in court-ordered non-binding arbitration hearings sometimes find themselves trying to prove to the judge why the judge shouldn’t find the same result.

 ADR stands for Alternative Dispute Resolution. Mediation, arbitration, binding arbitration are all forms of ADR. ADR eliminates the process involved with litigation. Most attorneys make the majority their living off the process of the law, not off the result of their efforts, therefore some attorneys view ADR not as Alternative Dispute Resolution, but as Annual Decline in Revenue. That said, in the past 15 years or so, many more attorneys have jumped on the band wagon, and have trained and become arbitrators themselves, so there are more attorneys who are knowledgeable about arbitration using industry experts as arbitrators and advise their clients to incorporate arbitration clauses for their clients since it’s often in their clients’ best interest. 

There are those who argue that the patients in medical arbitration cases, had little or no choice in signing the arbitration clauses, as they would be refused medical attention at many places and even refused medical insurance in some cases for refusal to sign the arbitration clause; thereby, making the voluntary requirement in question. The patient might have little or no other choices for medical treatment and possibly signs under duress. Additionally, others feel that the neutrality of the arbitrators appointed by such large corporations, like the insurance companies, is in question. These sorts of issues are not common to the construction related disputes that DMA is involved with.

 In baseball arbitration the player picks a number (for salary) and says, “that’s what I’m worth”. The owners pick a number and say, “that’s as much as I’m willing to pay.” At the arbitration, the owner presumably brings their number up a little. The player presumably brings their number down a little. Based on their knowledge of the industry and specifically on player salaries paid to other players of similar abilities, the baseball arbitrator must pick one of the two numbers, either the owner’s amount, or the player’s amount, which ever seems to be more reasonable. The arbitrator is not authorized to award a number in between the two parties’ requests. 

That depends. If the other party has not agreed to arbitrate, they cannot be forced to do so. Arbitration is voluntary. However, if the other party has already signed an arbitration agreement and is unable or unwilling to participate, the arbitration can, in some cases, take place without the other party being present. It depends on the arbitration clause that the parties agreed to. If the arbitration agreement or the rules and procedures state that the arbitration cannot take place without the other party present, you may need to consult an attorney, and possibly file a ‘Motion to Compel Arbitration’or take other action. Refer to the DMA Rules & Procedures Section 21: Participation & Attendance for the DMA rule regarding non-participation.