Arbitration is an alternative dispute resolution (ADR) process in which a neutral third party known as an arbitrator decides how a legal dispute should be resolved, much like a trial judge or jury. Sometimes parties elect to have a panel of arbitrators (usually three) decide their case by a majority decision. In arbitration, the parties have an opportunity to present their facts, offer evidence and witness testimony, and make legal arguments. After considering the merits of the case, the arbitrator will make a decision for the parties. While it is a more adversarial process than mediation, arbitration still has the advantage of fostering less contentiousness than litigation, thus preserving a more positive working relationship between the participants for the future.
There exists in North Carolina a strong public policy which favors the settling of disputes by arbitration. There are several state laws which govern the use of arbitration in various types of controversies and, historically, the process has been employed to resolve, most frequently, commercial and consumer disagreements. In 1999, the North Carolina Family Law Arbitration Act was enacted in order to extend the use of arbitration to family law issues other than the divorce itself.
Generally, arbitration is a voluntary and usually binding process which occurs outside of the supervision of the court and pursuant to a written agreement entered into by the parties or a court order that is entered with the consent of the parties. The agreement, or order, normally contains an explanation of the duties of the parties to resolve their legal dispute, and specifies a procedure for selecting the arbitrator and conducting a hearing. The parties may agree to use arbitration either before or after a lawsuit has been filed. Arbitration has certain distinct advantages, they are:
- It may be used after initial settlement attempts or mediation has failed and it can insure the resolution of disputed matters in a manner which may be more expeditious and less expensive than having a trial that is held before a judge or jury;
- The parties choose the arbitrator by mutual agreement. This may provide greater confidence in the decision resolution process because the parties have the ability to select a respected decision maker, who is knowledgeable in the subject matter they are involved and who, unlike a judge, is not influenced by such pressures as a heavy trial docket;
- Arbitration may be conducted in a private, neutral environment which affords the parties a greater degree of privacy and confidentiality as opposed to a public courtroom;
- The parties are able to set their own rules for the procedure of the arbitration hearing, including what conditions of privacy will apply; and
- The parties are able to specify where and when the hearing will be held which makes the process more convenient and less stressful.
Tharrington Smith’s professional neutrals are available to assist parties through arbitration. We are certified as mediators and are effective litigators in our individual fields of practice. We provide many years of experience and a deep understanding of the complex issues and disputes that individuals struggle with in a variety of situations. Call us for your next arbitration conference.