ARBITRATION DEFINED

ARBITRATION DEFINED

Arbitration

In arbitration, a neutral third party is empowered by the parties to decide the outcome of a dispute. Of all the methods of alternative dispute resolution, arbitration most closely resembles standard legal proceedings.

There are two types of arbitration: binding and non-binding. In binding arbitration, the parties agree to waive their right to go to court for a judicial decision. In non-binding arbitration, the parties have the discretion to abide by the arbitrator's decision.

Advantages

The value of arbitration lies in its relative speed and low cost. Both parties must agree to submit to arbitration; no one party is "dragged into court." The process is intended to be user friendly and it is relatively private, usually involving only the interested parties and relevant witnesses, if necessary. It provides the parties with an opportunity to choose an arbitrator with experience relevant to the substance of their dispute. Finally, parties can pursue their own cases with or without an attorney. Formal rules of evidence normally do not apply. However, strict procedural requirements must be followed.

Mediation

In some cases mediation is a more useful and efficient alternative dispute resolution option. This is particularly the case if there is an on-going relationship between the parties (in either a direct or indirect way) and/or there is a relatively small amount of money in controversy. Mediation is confidential and it allows for any creative settlement options that are satisfactory for all concerned. In mediation the neutral third party facilitates negotiation between the parties, assisting them towards resolution. The mediator may not render a decision.

If mediation is not successful in resolving the entire dispute, any outstanding issues shall be submitted to final and binding arbitration in accordance with the rules of that program. If such services are not available, the dispute shall be submitted to arbitration in accordance with the laws of the State of California. The arbitrator's award shall be final, and judgment may be entered upon it by any court having jurisdiction thereof.

Binding Arbitration

All disputes arising out of this agreement shall be submitted to binding arbitration. The arbitrator shall be selected in accordance with the rules of Arts Arbitration and Mediation Services, a program of California Lawyers for the Arts. If such services are not available, the dispute shall be submitted to arbitration in accordance with the laws of the State of California. The arbitrator's award shall be final, and judgment may be entered upon it by any court having jurisdiction thereof.

The Award

Under A.A.M.S. Rules, the arbitrator must make a decision within 15 calendar days of the close of the hearing. The arbitrator does not have to give justification or an explanation for the award unless the parties ask the arbitrator to do so. The award is sent to the A.A.M.S. office for forwarding to the parties.

Both the parties and the arbitrator are then asked to complete written evaluation forms.

In California, arbitration awards may be confirmed by the Superior Court and, once a court judgment is entered, the enforcement powers of the court are available to the parties.

Arbitration fees must be received by A.A.M.S. before the date of the hearing. Please contact A.A.M.S. staff to discuss our sliding scale fee schedule.

If you have a question or need a copy of the A.A.M.S. Arbitration Rules or any of the forms required for arbitration, call A.A.M.S. stafff: (415) 775-7200 x764; (510) 444-6351; (916) 988-1359; (310) 998-5590.

Please Note:

A.A.M.S. staff are not available to give legal advice. Also, they cannot review completed arbitration forms for accuracy. If you wish to arrange a consultation with an attorney, you may contact the Lawyer Referral Service of California Laywers for the Arts at (415) 775-7200 or (310) 998-5590.

Three Routes to Arbitration

The three possible routes to arbitration are described below. It is more efficient for the parties to agree in advance that any disputes arising from a contract will be submitted to arbitration with Arts Arbitration and Mediation Services (A.A.M.S.)

1. Contract calls for arbitration by A.A.M.S.

If the parties have signed a contract which calls for arbitration administered by California Lawyers for the Arts (C.L.A.) or A.A.M.S. either party may initiate the arbitration process by filing with A.A.M.S. a Demand for Arbitration form. This form is obtained from the A.A.M.S. administrator. Once the completed Demand for Arbitration is received by A.A.M.S., the administrator sends a Response to the Demand for Arbitration to the other named parties who may, but are not required to, file a response. Because the parties have agreed in advance to arbitration, the hearing may proceed even in the absence of the respondent.

2. Contract calls for arbitration but no provider is named

Sometimes the contract will specify the use of arbitration but not name the provider or will name a provider other than A.A.M.S . When this occurs, both parties must agree in writing to use A.A.M.S. The parties fulfill this requirement by both signing a Choice of Forum form. Once this is completed, the claiming party then files with A.A.M.S. a Demand for Arbitration, and the responding party may, but is not required to, file a response.

3. No arbitration contact clause

When there is no existing written agreement to refer disputes to arbitration, both parties must agree in writing to submit their dispute to arbitration with A.A.M.S. by completing the Arbitration Submission Agreement and Attachment form. In this form, provided by A.A.M.S., both parties need to be specific about the information they supply as it will determine what issues may be presented to the arbitrator.

About the Arbitrators

Neither legal training nor extensive knowledge of the law is a pre-requisite to be an arbitrator, but they must be familiar with the requisite formalities and documentation involved in the process. A.A.M.S. trains all its arbitrators in these formalities and communications skills.

A.A.M.S has many artists, arts administrators and attorneys specializing in art and entertainment law on its volunteer arbitrator panel.

Selecting an Arbitrator and a Date

To set up the arbitration hearing the administrator sends the parties a list of potential arbitrators with a brief description about their backgrounds which the parties return after striking out names which they feel are inappropriate. Potential arbitrators are asked to disclose any facts which would prevent them from being neutral in relation to the parties or the situation. Prior dealings or relationships would, unless all of the parties consent, result in disqualification.

Similarly, a calendar is sent to the parties for their return after striking out unavailable dates. The administrator can then select a mutually acceptable arbitrator and date.

If either party does not return these required forms within a 10day period, the administrator will presume that all dates and potential arbitrators are suitable. A Notice of Time and Place of the Arbitration Hearing is sent to the parties with at least 10 days notice of the date of the hearing.

Attorneys are Optional

In most instances, persons represent themselves at the arbitration hearing. Sometimes parties seek prior consultations with attorneys in order to develop a presentation strategy or for a review of their legal position. If a party chooses to be represented by an attorney during the hearing, the other side must be notified, through A.A.M.S., at least 10 days prior to the hearing. (Notice by telephone is sufficient.)

The Hearing

The arbitration hearing is opened when the arbitrator takes an oath in front of the parties promising to render an impartial decision. The arbitrator usually proceeds by asking the complaining party to present his/her case with any relevant evidence, followed by the other side. Since the arbitration is final, quasi judicial and somewhat formal, the arbitrator must maintain absolute impartiality, decorum and a sense of fairness. At the same time, the arbitrator has some flexibility in conducting the hearing.

Evidence

Because evidence rules are not applied in arbitration, there is a great deal of flexibility in deciding the relevance of the proffered evidence. In order to maintain an aura of fairness, it is usually best to "hear it all." However evidence that is poorly documented, hearsay, circumstantial, or mere opinion will be viewed with skepticism. Furthermore, each party should have the opportunity to comment on the documentation submitted by the other side.

Mediation Encouraged

As a matter of policy, the A.A.M.S. Arbitration Rules emphasize mediation at every stage of the process. Even during arbitration, arbitrators are encouraged to promote the parties' own negotiations toward agreement and to direct them towards any settlement possibilities.

Closing the Hearing

The hearing is closed after the parties have covered all their issues and presented their documentation. At the discretion of the arbitrator, the hearing may be left open for the submission of additional evidence. If so, each party will have an opportunity to see the additional documentation and comment upon it. In no case are the parties to contact the arbitrator directly; they should direct all communications through A.A.M.S.staff.

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