What is Arbitration?

What is Arbitration?

Arbitration is a substitute for a jury trial. The arbitrator, who is usually an attorney, acts as both judge and jury. The arbitrator decides what testimony or documents come into evidence, which party wins the case and how much the losing party has to pay the winner.

In most Oregon counties, arbitration is required for cases where the amount sought is less than $50,000. These are known as “court-mandated” arbitrations. After a court-mandated arbitration, either party – if unsatisfied with the award – can appeal the decision and cause the case to be re-tried to a judge or a jury. However, a party that appeals an arbitration decision and doesn’t obtain a better result at trial faces some financial penalties; so a decision to appeal an arbitration award is not without its risks.

In situations other than court-mandated arbitration, the arbitration result often cannot be appealed and is a final resolution of the case. This is known as “binding arbitration.” Your contract with a car dealer or your bank or your insurance company may require you to participate in a binding arbitration if you pursue a claim against one of those entities. The requirement in a contract to participate in binding arbitration is often upheld by the courts, but not always.

Arbitrations are less expensive, less stressful and less time-consuming than jury trials. In personal injury cases, arbitration in advantageous in that it saves the cost of bringing a doctor into court to testify to the plaintiff’s injuries; the arbitration rules allow the doctor’s medical records to come into evidence in lieu of live testimony.

Arbitrations are typically conducted in a conference room at either the arbitrator’s office or the office of one of the attorneys. The average car accident arbitration (with relatively minor injuries to the plaintiff) lasts about three hours, as compared to about two days for a jury trial of that same case.

Arbitrators in court-mandated arbitrations charge $125 an hour for a maximum of ten hours. Each party initially provides the arbitrator with $500 to bill against. The losing party must pay the winning party’s share of the arbitrator’s fee in addition to paying their own share. In addition, the losing party in an arbitration must reimburse the winning party for its file fee (about $240), service fee (about $60) and a $275 prevailing party fee.