When it comes to settling disputes, particularly in the commercial world, most people immediately think of courtrooms, judges, and lengthy legal battles. However, there’s an alternative method to resolve conflicts that’s growing in popularity: arbitration. And at the heart of this process is the arbiter.
What is an Arbitrator?
An arbiter (also commonly referred to as an arbitrator) is essentially a neutral third party who helps resolve disputes between two or more parties outside of the courtroom. Unlike a judge, an arbiter is usually chosen by the parties involved in the dispute. Once selected, the arbitrator’s role is to listen to both sides, review evidence, and ultimately make a decision that is legally binding, just like a court judgment.
This process is particularly useful in commercial disputes, where companies want to avoid the long, drawn-out nature of court proceedings. It’s faster, often less expensive, and provides both parties with some control over who resolves their case.
The Difference Between Arbitration and Commercial Litigation
It’s easy to mix up arbitration with commercial litigation, but they are quite different. Litigation involves taking a dispute to court, where a judge or jury will decide the outcome. Arbitration, on the other hand, is a private process, and the decision-making power is given to the arbitrator.
In commercial litigation, the legal process is usually public, which can be a drawback for companies that prefer to keep their business dealings confidential. Arbitration offers a more private avenue, as the proceedings and outcomes are generally kept out of the public eye.
Why Should You Care About Arbitration?
If you’re running a business or involved in any form of commercial disputes, it’s crucial to understand the arbitration process and the role of the arbiter. Here’s why:
1. Efficiency and Cost Savings
Going through the traditional court system can take years and cost a significant amount of money in legal fees. Arbitration, however, tends to be much quicker, since it doesn’t have to follow the same strict procedural rules that courts do.
2. Expertise of the Arbiter
One of the biggest advantages of arbitration is that the parties can choose an arbiter who has specific expertise in the area of the dispute. For instance, in a complex commercial disagreement, both parties might agree on an arbiter who is well-versed in commercial law.
Your commercial lawyer can help identify the right arbiter with the necessary experience.
3. Confidentiality
For businesses, confidentiality is often key. Court cases, especially those involving high-profile companies, tend to be public affairs, with documents and hearings accessible to anyone. Arbitration, on the other hand, is typically confidential. Both the proceedings and the final decision remain private, allowing businesses to keep sensitive information out of the spotlight.
The Role of Commercial Lawyers in Arbitration
Having a skilled commercial lawyer by your side is essential when entering arbitration. Even though the process is more informal than traditional litigation, it doesn’t mean it’s less complicated. A commercial lawyer can guide you through the intricacies of the process, help you prepare your case, and ensure that the arbiter you choose is fair and experienced.
Moreover, if the arbitrator’s decision is unfavorable or there are procedural concerns, your lawyer can help you explore limited options for appeal or review, though these are rare in arbitration.
Is Arbitration Right for You?
Not all disputes are suited for arbitration. For example, some issues, like criminal matters, must go through the court system. However, if you’re dealing with commercial disputes, such as breaches of contract, shareholder disagreements, or disputes over intellectual property, arbitration can be a great alternative to commercial litigation.
It’s also worth noting that many businesses now include arbitration clauses in their contracts. These clauses can save companies from future headaches, though it’s wise to have a commercial lawyer review any arbitration agreements to ensure they’re fair and enforceable.
Consider Arbitration to Settle Legal Disputes
Understanding the role of an arbitrator and the benefits of arbitration can make a world of difference when handling commercial disputes. It offers a more flexible, faster, and often more private way to resolve conflicts, which is why so many businesses prefer it over commercial litigation. If you ever find yourself in a dispute, having a knowledgeable expert like Judge Shira A. Scheindlin who can guide you through the arbitration process could be the key to a successful resolution.
