Do I Give Up Any Rights by Agreeing to Binding Arbitration

Litigation is a common way to resolve disputes, but it is not the only way to find a solution when a disagreement arises. There are alternative forms of dispute resolution including binding arbitration and mediation.  These alternatives to litigation can provide benefits and may be preferable depending upon your situation. However, there may also be drawbacks to choosing either arbitration or mediation. Magnifying glass on a contract with selective focus on the word "contract".

Mediation is generally a voluntary process and the parties to the dispute can walk away at any time. Arbitration, on the other hand, can be binding.  Before agreeing to legally binding arbitration, you need to understand that you do give up certain rights when you make a commitment to arbitrate your dispute. It is a good idea to speak with an experienced San Diego alternative dispute resolution lawyer before agreeing to binding arbitration. Sepahi Law Group, APC can help you to determine if arbitration is the right option for you, and can also represent you during the arbitration process. Call today to schedule a consultation and learn more.

Agreeing to Binding Arbitration Affects Your Rights

When agreeing to binding arbitration, you give up the right to have a judge or a jury hear your case and make a decision. You will not be able to file a lawsuit if you have agreed that your legal issues should be resolved in arbitration. You will have to live with the decision that an arbitrator makes. While you can appeal the outcome of an arbitration, the courts won’t substitute their judgment for that of an arbitrator and the decision made in arbitration will stand unless there were procedural or legal errors.

You may also give up the right to form class actions or become part of mass tort litigation when you agree to binding arbitration. This can have a major adverse impact on your right to get justice.  For example, consider a $5 product you buy that turns out to be defective. You would not want to sue the company over a $5 loss because of the hassle, time and expense of litigation. However, you might want to become part of a large class action with thousands of other people who all suffered that same $5 loss.  If you have agreed to binding arbitration, then you are not going to be able to form a group of plaintiffs. No one will get compensation for their losses in this case.

Because agreeing to binding arbitration can impose limitations on your legal options, you should consider whether entering into this type of agreement is the right option. Often, people will agree to arbitration before a dispute arises. The arbitration clause will usually be contained in a take-it-or-leave-it contract. For example, if you buy a cell phone and the contract has a binding arbitration clause in it, the cell phone company is almost definitely not going to negotiate with you to remove that clause. You’ll have to agree to binding arbitration even before any problem with the phone arises. You’ll be bound by that agreement if a legal issue does come up.

In some limited cases, parties may be asked to agree to binding arbitration at the time when a dispute has already arisen. For example, a couple can chose to arbitrate a divorce or business partners can agree to arbitrate a disagreement. You should have an attorney advise you on whether this is a good option.

Sepahi Law Group, APC has experience representing clients in binding arbitration and other forms of alternative dispute resolution. Call today to schedule a consultation and learn how a San Diego arbitration lawyer can help you.

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