What is the Cost of Arbitration?

Arbitration is a form of alternative dispute resolution that is frequently used in business litigation. It is very common for commercial contracts to contain arbitration clauses requiring that all disputes arising from the commercial transaction be resolved in arbitration.  Parties who become involved in a disagreement may also decide at the time of the conflict that arbitration is a better way of resolving their case than going to court. arbitrator

There are many benefits associated with arbitrating a dispute. For example, arbitration can keep your dispute private and make it possible for you to have someone familiar with your industry preside over your case.  However, you also need to be aware that arbitration may have costs associated with the process. It is important to consider the cost of arbitration before you decide that this approach is the right one for you to take. An experienced San Diego business law attorney can assist you throughout the arbitration process and help you to do everything possible to manage the cost of arbitration.

What is the Cost of Arbitration?

The cost of arbitration varies depending upon the circumstances.  If the arbitration is ordered by the court at a case management conference or after a stipulation, then the court may pay for the costs. According to the Superior Court of California, County of San Diego,  the court will pay the arbitrator presiding over court-ordered arbitration a maximum of $150 for up to four hours, and a maximum of $300 regardless of the number of sessions that the arbitrator and disputing parties attend. The court pays for the costs only in situations where the parties involved in the disagreement choose to use an arbitrator on the court’s Arbitration Panel.

When the arbitration is not court ordered, then the court does not pay the fees and costs of arbitration. In many business disputes, the arbitration is not mandated by the court. Instead, the dispute has to be decided in arbitration due to an arbitration clause the parties signed, or the parties agree to submit to non-binding arbitration to keep their case from going to trial.

Most arbitrators will charge by the hour when parties submit a dispute to arbitration. The costs of the arbitrator’s time can vary significantly depending upon the arbitrator’s background, training and qualifications. The Superior Court of California estimates that the hourly fees for an arbitrator usually range from between $200 per hour to $1,000 per hour. The costs and fees may be higher in situations where you choose an arbitrator who not only has the necessary legal-specific know-how to resolve the case but who also has a background in and understanding of your particular field or industry.

When paying by the hour, it is possible to try to reduce the cost of arbitration by resolving some of the disputed issues on your own. If you can try to come to an agreement about most or all of the points of conflict, then your arbitrator can make decisions on fewer issues and the process will go quicker, thus saving you money.

A San Diego arbitration law attorney at Sepahi Law Group, APC will work hard to keep you to manage the cost of arbitration while presenting a compelling case to the arbitrator. Call today to schedule a consultation and learn more.

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