Arbitration is a less formal alternative to traditional litigation, offering parties a forum to definitively resolve their dispute with the undivided attention of an Arbitrator. The Arbitrator rules on discovery requests, determines what evidence is admissible and reviews testimony prior to rendering a binding decision.
The three primary forms of Arbitration offered by NAM (National Arbitration and Mediation) are:
- Open Arbitration, a hearing in which the Arbitrator hears a case and renders a final decision.
- High/Low Arbitration, a process in which the parties, by agreement, restrict the range of an Arbitrator’s decision by establishing “high” and “low” parameters.
- Baseball Arbitration, which typically involves the submission by each party of his/her last best figure and the reason why it should be accepted with the Hearing Officer’s determination being restricted to either one figure or the other.
Important Points About Arbitration
- Arbitration is binding and final. The role of the Arbitrator presiding over a binding Arbitration is to consider evidence presented by each side and renders a decision regarding the value of the case.
- Arbitration is a streamlined process to settle disputes and as such does not entail comprehensive discovery. Written documentation such as IME’s; depositions; medical reports; written estimates of value, damage to, cost of repair of, or loss of property; affidavits, etc. are acceptable as evidence. The goal is efficient and economical resolutions to disputes.
- In some Arbitration proceedings, High/Low parameters are negotiated prior to the hearing for a specific range of the award. The parties must agree to the maximum and minimum, which are written into the Arbitration contract. These High/Lows are not disclosed to the Arbitrator. If the Arbitrator’s decision is within the set parameters, the award stands. If the decision exceeds the High parameter, the High dollar parameter is awarded. Conversely, if the decision falls below the Low parameter, the Low dollar parameter is awarded. This allows for a guaranteed resolution of a dispute and minimizes the risks.
Procedure of an Arbitration
Once parties verbally agree to arbitrate, a submission form is jointly executed. The form includes such pertinent information as names, addresses and telephone numbers of each party to the case, as well as, case file numbers where applicable. Also indicated is whether the hearing is to determine liability, damages, or both. In addition, the form notes any specific agreements between the parties. In the case of High/Low Arbitration, parameters are included. After the contracts are signed and received, all parties participate in the selection of the Arbitrator, date, time, and location of the hearing. All arbitrations are subject to NAM’s Rules and Procedures.
At least ten days prior to the hearing, each party shall send to the other parties and NAM any pre-hearing papers including a list of documents to be submitted and witnesses to be presented. NAM will forward all papers to the Arbitrator. At the Arbitration, the parties have the opportunity to present their case in a manner similar to a non-jury trial in the public court system. Each side may present witnesses and exhibits and are permitted cross-examination and closing arguments. After deliberation, the Arbitrator will submit the decision to NAM within three weeks of the hearing. NAM, in turn, will forward to all parties.