Arbitration is a method of alternative dispute resolution that can be preferable to litigation. Many companies and corporate entities prefer arbitration when a product defect or employment law complaint arises. An experienced attorney at Sepahi Law Group can represent clients during the arbitration process and can advise corporate clients on the inclusion of arbitration clauses in contracts.
When a legal dispute arises, court litigation is just one method of resolving the relevant issues. Litigation can be very costly for companies who may routinely be subject to nuisance lawsuits and who may need to hire an attorney to defend against myriad court actions brought by customers, competitors or workers.
To avoid the problems associated with litigation, companies may include an arbitration clause in their contracts. Arbitration clauses are generally binding, which means that the dispute must be submitted to arbitration even if one party involved decides after the fact that he wishes to go to court instead. Courts will decline to enforce arbitration clauses only in limited cases such as contracts of adhesion (contracts that are not negotiated) when the terms of the arbitration clause unreasonably favor the drafter of the contract. Parties may also choose to enter into arbitration voluntarily when a dispute arises if they do not wish their legal issue to become public record.
Arbitration clauses may outline a specific arbitration process or the parties involved in the dispute can determine together at the time who should preside over arbitration. An experienced third-party arbitrator or panel of arbitrators will preside over the process.
The arbitration process may be informal or may proceed as an effective mock trial where the same steps are followed that would be taken in court. The arbitrator will hear arguments from parties on both sides of the dispute and will then make a binding decision.
When a dispute is submitted to arbitration, all parties involved must abide by the decision that the arbitrator has made. While the outcome of arbitration can be appealed, a court will only overturn the decision in cases where there was a major procedural issue or something went wrong in the arbitration process. A judge will not substitute his own opinion for the decision of the arbitrator when an appeal is filed.
The stakes are high in arbitration because the outcome is binding. However, arbitration can be less costly than litigation and presents many benefits. Confidentiality is just one advantage; an experienced arbitrator with knowledge of industry-specific issues can also be chosen so a better resolution is likely to occur.
If you or your company is involved in arbitration in San Diego or you are considering including an arbitration clause in a contractual agreement, Sepahi Law Group can help. Call today to speak with an experienced commercial litigation attorney for help with all arbitration issues.