What is Arbitration?
If you’ve recently bought a house, car or boat you’ve probably signed an arbitration clause. This means that if you and your home builder or vehicle seller have a dispute, you will probably have it resolved by an arbitrator, rather than a court or jury.
By signing an arbitration clause you and the either side give up your rights to sue in court and have a judge or jury decide your case. Instead, you will choose a private arbitrator to hear your case. The arbitrator is usually a former judge, or lawyer, with experience deciding cases. Once the arbitrator has been chosen each side spends a few months gathering the information it will need to prove its case (a stage called “discovery”). Eventually the arbitrator will hold a final hearing at his or her office. Each side presents its witnesses and documents to the arbitrator, who will then decide which side wins. If money is involved, the arbitrator will tell the losing side what it has to pay. Once the decision is made the winning party can have a court enforce the arbitrator’s decision.
There are pros and cons to arbitration. Cost can be an issue. You and the other side will have to pay the arbitrator to hear the case. Sometimes sales contracts require the case to be heard by three arbitrators, which will greatly increase the cost of having your case heard.
Some contracts state that the arbitrator’s decision is final. Others give the losing side the right to appeal. Occasionally, an arbitrator’s decision can be overturned by a court.
Supporters of arbitration usually argue that arbitration is quicker and cheaper than taking a case to trial at court. Sometimes that’s true, sometimes it’s not.
More and more Texas disputes are being decided in arbitration. And even though these disputes are not tried to a jury, they still require the assistance of a skilled trial attorney. We have represented clients at arbitration for years and know how the game is played. Call if we can help.