What is Arbitration?

Arbitration is a legal process which takes place outside of the courts, but results in a final and binding decision similar to a court’s judgment. Parties to a dispute can opt out of the court system, and submit their case for decision by a neutral third party, the arbitrator. Arbitration is usually faster and more informal than going to court, and often much less expensive. It also has the advantage of being private and confidential.

USA&M has published rules of arbitration, which, along with federal and state law, govern the process and procedures. Within the limits permitted by law, parties are free to negotiate the ground rules under which they want their arbitration to take place, such as the number of arbitrators or whether formal rules of evidence will apply. Binding arbitration clauses can be written into most kinds of contracts, requiring that in the event a dispute arises out of the contract the parties will go to binding arbitration instead of going to court.

The decision of an arbitrator is called an award. It is as binding on the parties to the arbitration as a court judgment, and it can be enforced by the courts if necessary.