Arbitration is the most traditional form of alternative dispute resolution. It is a procedure where the decision-making power has been given to a neutral third party, the arbitrator, who renders a decision at the end of an arbitration hearing, and that decision is final and binding, subject only to a limited court review.
Many contracts now have provisions, which are usually enforced by the courts, requiring that the parties engage in binding arbitration of their disputes rather than filing claims in court. Call the Denver arbitration lawyers at the Law Offices of Murray & Damschen, P.C., for a free assessment of your case.
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Arbitration is often required by a contract entered into by the parties, in which they agree that if a dispute should arise between them, they will not file an action in the court system. By agreeing to arbitration, the parties, among other things, are waiving their right to a trial by a jury of their peers. Unless otherwise agreed, the decision of the arbitrator is binding and non-appealable, except in extremely limited circumstances such as in the case of fraud or collusion on the part of the arbitrator.
The arbitrator is an impartial person chosen by agreement of the parties. The arbitrator can read briefs, hear testimony, examine evidence and will then render an opinion on liability and damages in the form of an "award of the arbitrator" after the hearing. Once confirmed by a court of appropriate jurisdiction, the award can be subsequently entered as a judgment.
There are many different forms that arbitration can take, depending on the parties' desires. One is called "high-low arbitration" or "bracketed arbitration" where the parties agree in advance to the parameters within which the arbitrator may render an award. If the award is lower than the preset "low," the defendant will pay the agreed-upon low figure; if the award is higher than the preset "high," the plaintiff will accept the agreed-upon high; if the award is in between, the parties agree to be bound by the arbitrator's figure. The high and low figures may or may not be revealed to the arbitrator. Another form is called "baseball arbitration" wherein each of the parties chooses one and only one number, and the arbitrator may select only one of the figures as the award. In a "baseball arbitration", there are only two possible outcomes. A similar form of arbitration is known as "night baseball arbitration" where the parties exchange their own determination of that value of the case, but the figures are not revealed to the arbitrator. The arbitrator will assign a value to the case, and the parties agree to accept the high or low figure closest to the arbitrator's value.
The parties may also choose "non-binding" arbitration, which is a procedure conducted much like a binding arbitration, except that the arbitrator issues the award after the hearing that is not binding on the parties, and they do not give up their right to a jury trial. In that case, the arbitrator's award is merely an advisory opinion.
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Contact the Lakewood dispute resolution attorneys at Murray & Damschen, P.C., if you need representation in a mediation or arbitration, or if you are looking for a third-party mediator or arbitrator.