Arbitration FAQs

Los Angeles County Attorneys Skilled in Alternative Dispute Resolution

Steve A. Buchwalter is a mediation and arbitration lawyer who has honed his skills in the Los Angeles region for over two decades. He has significant experience representing clients through alternative dispute resolution, including arbitration in commercial, securities, and employment matters. He can answer your questions about this process and effectively represent you in an arbitration proceeding if needed.

What is Arbitration?

Arbitration is a form of alternative dispute resolution (ADR) in which a neutral third party (an arbitrator) hears a dispute between two or more parties. The arbitrator, who can be a single person or a panel, will review the information presented to it and issue its final decision on the matter.

How Does Arbitration Differ from Mediation?

Mediation is a type of ADR in which the parties involved agree to work in good faith toward finding a mutually agreeable resolution of a disputed matter. A mediator facilitates the negotiation process between the parties but does not make a decision in favor of one party. He or she simply helps the parties reach a settlement. If a settlement is reached, the parties are only bound to it if it is in writing.

In arbitration, a third party decides the outcome of the issue. Depending on the particular rules of the arbitration, the arbitrator’s decision may have the power to bind both parties (called binding arbitration). In other words, a decision in arbitration can carry the same significance as a decision made by a court. In fact, an arbitrator’s decision in a binding arbitration is much harder to reverse than if that same decision was made by a court.

Is Arbitration Binding?

The arbitration agreement between the parties and/or the rules of the arbitration forum will determine whether an arbitrator’s decision is binding or non-binding. A binding decision is final and legally enforceable with limited grounds for appeal. If the decision is non-binding, either party may reject the decision, in which case it can pursue litigation or seek another form of ADR.

What is the Role of the Arbitrator?

The arbitrator is a neutral third party whose function is akin to that of a private judge. The default rule in California is for a single arbitrator to oversee an arbitration proceeding. The parties, however, may agree to arbitration by more than one arbitrator, or a panel. The California Arbitration Act requires that arbitrators comply with the same ethical standards adopted by the judicial council, which includes disclosure of any information that one could reasonably perceive as compromising the arbitrator’s impartiality, and disqualification based on that information.

Securities arbitrations with FINRA member firms are a little different. Those arbitrators (and the forum) are not required to follow the California Arbitration Act as they have their own rules on those impartiality issues. Further, the default rule on the number of arbitrators is three, not one.

What is the Cost of Arbitration?

The cost of arbitration depends largely on the arbitration forum, the arbitrator’s fee, the complexity of the matter, and the length of the arbitration. An arbitrator will typically charge for the time he or she spends reviewing all the information presented by the parties, as well as the cost of any pre-conference hearings. The parties may need several months to prepare for the arbitration, which includes discovery. The hearing can last anywhere from one day to a week or more. The arbitrator may assign certain costs, such as attorneys’ fees, to one party in his or her final award. In employment disputes, the employer may be responsible for the costs of arbitration.

Securities arbitration s before a FINRA panel is generally less expensive than at other forums as brokerage firms are required to underwrite the process.

What are the Advantages and Disadvantages of Arbitration?

Many disputes can be resolved more efficiently in arbitration than in litigation. As a result, arbitration is usually less costly for the parties. It is also private, and awards are usually not made public (with FINRA arbitrations being an exception). Unlike in litigation, the parties can also choose their own “judge,” which is particularly useful in highly technical matters.

Arbitration, however, also has its disadvantages. If a party is dissatisfied with an arbitration decision, its ability to seek relief in a court is limited, and in many cases impossible if the decision is binding. A party may also be at a disadvantage if he or she agreed to mandatory arbitration without fully understanding that he or she was waiving the right to litigation. This can put a party at a disadvantage when the other side is more familiar with arbitration proceedings, particularly when selecting an arbitrator.

Seek Guidance from a Ventura County Lawyer for Arbitration or Mediation

Steve A. Buchwalter is an experienced arbitration attorney who has helped individuals and entities in Ventura County and beyond resolve commercial, securities, employment, and other disputes through arbitration. He can evaluate your case, discuss whether arbitration or another form of ADR is a viable alternative to litigation, and represent you in arbitration. He works with clients in Beverly Hills, Irvine, the San Fernando Valley and throughout Southern California. Call us at 818-501-8987 or contact us online for a consultation.