Using Arbitration Can Be Quick, Flexible And Inexpensive As The Pandemic Rages On
Going to court often means years of litigation and delay.
By ANDREW KINSTLER Pacific ADR
So, you have a dispute with a supplier, a customer, even an employee. If you go to court, you are looking at years of litigation and delay, and with the current backlog due to COVID restrictions, the timeline is longer than ever.
Arbitration might be an alternative to consider with your attorney. It can be quick, flexible, and inexpensive, even where the parties are paying for the arbitrator's time.
WHAT IS ARBITRATION?
Arbitration is a method of dispute resolution where a person, usually an attorney, is appointed to be “judge and jury” to resolve a dispute.
Arbitration arises from a private agreement between the parties, often based on an arbitration clause in the contract between the parties covering the issue in dispute.
However, parties can agree to arbitrate where they have no prior agreement requiring arbitration, and in an environment where it is increasingly difficult and expensive to get a court date, arbitration can be a cost-effective way to bring closure to a dispute. The parties simply need to agree to arbitrate. They can then choose an arbitrator (or ask their local court to appoint one) and they can then agree upon, or work out with the arbitrator, rules and procedures that can be as simple or complex as needed to cost-effectively and expeditiously resolve the dispute.
An arbitration proceeding does not have to follow any particular “pre-ordained” model. The parties can agree to almost any method of handling the hearing. For example, the parties can agree that each party will present a proposed “decision” and the arbitrator's only role will be to choose between the two proposals. Or that each side will have a limited amount of time to present a case. The only limits are the creativity of the parties and their willingness to agree on the procedure to be used.
CAN YOU BE FORCED TO ARBITRATE?
Where the parties have a contract clause requiring arbitration they will still, at times, disagree on whether they agreed to arbitrate a particular dispute. As a result, a court may need to weigh in at the outset on whether a dispute is subject to private arbitration.
A party seeking to compel arbitration must file a lawsuit to order arbitration, followed by a motion that shows an agreement to arbitrate and alleges the other party's refusal to arbitrate under the agreement. Conversely, a party seeking to avoid arbitration must show the absence of an arbitration agreement.
Both federal law and Washington law favor arbitration. However, it is the responsibility of the courts to determine whether the parties agreed to arbitrate and that the arbitration contract is valid. Courts will order arbitration if the court finds that there is an enforceable agreement to arbitrate. If the court finds that there is no enforceable agreement, it may not order the parties to arbitrate.
All in all, where there is an arbitration agreement in place, courts usually order the parties to arbitrate the dispute.
WHAT CAN THE ARBITRATOR DECIDE?
Even when an arbitration agreement is enforceable, and most are, an arbitration agreement only applies to those issues the parties have agreed to arbitrate. When arbitrability is contested in court proceedings, the court makes the threshold determination of whether a dispute falls within the scope of the parties' arbitration agreement, unless the parties delegated this determination to the arbitrator.
An issue that often arises is whether a party can be required to arbitrate a claim arising from a statutory right, such as a claim arising under the Washington Law Against Discrimination or the minimum wage act. The law is now settled that a contractual arbitration agreement covering such claims is enforceable, and the parties will be required to arbitrate such claims if the waiver of the judicial forum is clear and unmistakable.
WHAT IF YOU ARE ALREADY IN COURT?
A party's failure to seek to compel arbitration in a timely manner may constitute waiver of the party's right to arbitrate. Unless the parties agree otherwise, the arbitrator usually decides whether a party has waived its right to arbitrate by delaying in demanding arbitration or failing to comply with a contractual time limitation or precondition to arbitration.
HOW DOES AN ARBITRATION PROCEED?
The parties can agree on almost any procedure for presenting the dispute to the arbitrator. However, in the absence of a contrary agreement between the parties, the Washington Uniform Arbitration Act establishes a number of procedural minimums for the scheduling of the arbitration hearing:
1. The arbitrator shall set the time and place of the hearing and give notice at least five days before the hearing begins.
2. A hearing may be adjourned at the request of a party, for good cause shown, or on the arbitrator's own initiative.
3. A hearing may not be postponed to a time later than that set forth in the arbitration agreement unless the parties agree to a later date.
4. A decision must be made based on the evidence “produced,” even if a party who was notified of the hearing does not appear.
5. A party to an arbitration proceeding may be represented by a lawyer.
Unless the parties agree otherwise, the arbitrator has substantial authority to compel the attendance of witnesses at the arbitration proceeding and to produce records and “other evidence” at the hearing.
Arbitrators now consistently oversee hearings that are completely virtual, with all parties and witnesses appearing by videoconference. The parties and the arbitrator can be physically located at different locations literally all over the world, with no one having to travel, or even leave home, to attend the arbitration. As we have all seen in the past 18 months, the technology for such a proceeding is now very stable and, while not perfect, most arbitrators and litigation attorneys will attest to the cost-effectiveness and overall effectiveness of virtual arbitrations. They are here to stay.
Andrew Kinstler is a mediator and arbitrator with Pacific ADR. He concentrates his mediation/arbitration practice on employment law, commercial disputes, and personal injury cases, having litigated in those areas for almost 40 years with the Helsell Fetterman law firm.
The original article can be found on the DJC website here