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, and in fact, in binding arbitration, the parties agree to waive their right to go to court for a judicial decision.
AAMS Rules and Procedures
The arbitration process is governed by the AAMS Rules and Procedures. Parties should review these rules at the beginning of the arbitration process. Questions about the rules may be directed to the AAMS administrator, however the administrator cannot give legal advice.
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." It is also relatively private, usually involving only the interested parties and relevant witnesses, if necessary, and it provides the parties with an opportunity to choose an arbitrator with experience relevant to the substance of their dispute.
About the Arbitrators
Arbitrators need not have legal training or extensive knowledge of the law, but must be familiar with the requisite formalities and documentation involved in the process. Most arbitrators on the AAMS panel are attorneys who have knowledge relevant to the legal issues presented.
Two Routes to Arbitration
Under the AAMS Arbitration Rules and Procedures, there are two routes to the arbitration hearing:
1. Contract calls for arbitration by AAMS
If the parties have previously executed a contract, which calls for arbitration by AAMS in the event of a dispute, one party may initiate the arbitration process by filling a demand for arbitration. The other party may, but is 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 or different provider is named; there is no arbitration clause in the contract; or , there is no contract between the parties
Sometimes the contract will specify the use of arbitration but not name the provider or will name a provider other than AAMS. If this is the case, both parties must agree in writing to use AAMS by filling out an Arbitration Submission Agreement form. When there is no written agreement or a written agreement that does not contain a clause to refer disputes to arbitration, both parties must agree in writing to submit their dispute to arbitration with AAMS by completing the Arbitration Submission Agreement.
Selecting an Arbitrator and a Date
Prior to the arbitration hearing, the case administrator sends the parties a list of potential arbitrators and a brief description of their backgrounds, which the parties return after striking out names of individuals they do not want to act as the arbitrator. Also included with the list of arbitrators are each arbitrator's disclosure of any past or present relationship with the parties or their counsel, direct or indirect, whether financial, professional, social, or any other kind.
Along with the list of potential arbitrators, a calendar is sent to the parties for their return to AAMS after striking out unavailable days, The administrator then selects an arbitrator from the remaining names and a mutually convenient date. If either party does not return these forms within the given time period, the administrator will presume that all dates and potential arbitrators are suitable. A notice of time and place of the arbitration hearing is then sent to the parties with at least 15 days notice to the date of the hearing.
Where arbitration will proceed by submission of documents rather than by oral hearing, the administrator will coordinate a deadline with the parties.
Attorneys are Optional
Parties may represent themselves at the arbitration hearing. Often they seek prior consultations with attorneys in order to develop a strategy for their presentation or 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 at least 10 days prior to the hearing.
The hearing is opened when the arbitrator takes an oral oath in front of the parties promising to render an impartial decision. The arbitrator usually proceeds by asking the complaining party to state his/her case and present any relevant evidence, followed by an opening statement by the other side. Since arbitration is final, quasi-judicial and somewhat formal, the arbitrator must at all times maintain absolute impartiality, decorum and a sense of fairness. At the same time, the arbitrator has some flexibility in structuring the hearing.
The arbitrator is not required to adhere to the rules of evidence, which govern court proceedings. The arbitrator will usually hear all relevant evidence submitted by the parties. However, evidence, which is poorly documented, hearsay, circumstantial, or mere opinion, may be given less weight or excluded at the discretion of the arbitrator. Each party will have an opportunity to comment on the documentation submitted by the other side.
AAMS recognizes that parties may decide to mediate at any stage instead of arbitrate. If the parties and the arbitrator agree, the arbitrator may mediate the dispute in order to facilitate resolution. Mediation may only proceed after parties sign a written agreement to participate in mediation. If mediation does not result in an agreement the arbitrator may NOT resume arbitration proceedings and may no longer serve as the arbitrator for your case. Arbitrators are also encouraged to promote the parties' own negotiations towards 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 AAMS staff.
Under AAMS rules, the arbitrator must make a decision within 30 calendar days of the close of the hearing. The award is sent to the AAMS 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; once a court judgment is entered, the enforcement powers of the court are available to the parties.
If you have a question or need a copy of the AAMS Arbitration Rules and Procedures or any of the forms required for arbitration, call AAMS staff: (510) 990-6030
CLICK HERE to request AAMS assistance online!