Because arbitration, including car accident arbitration, is often touted as a cheaper and quicker resolution compared to litigation, curious minds may wonder how long arbitration takes. While many proponents of arbitration state that it often moves more quickly than litigation, critics state that it can be just as long as traditional litigation in the court system. While this may certainly be the case, it is clear from this comparison that various factors influence the arbitration timeline, and no two arbitrations will be precisely the same. This means that the length of arbitration can vary greatly, and no one answers how long arbitration takes.
Is Arbitration Faster?
Because every arbitration hearing is different, this article will examine the arbitration process through the lens of determining where in the process the parties may expect to spend more time and places that may be sped up through the preparation and agreement of the parties. This article aims to help readers determine whether arbitration is a valuable option for their dispute by accurately understanding the time it may take and any influence they may have throughout the arbitration.
An Introduction to Arbitration
Arbitration is an alternative dispute resolution mechanism that has exploded in popularity around the globe in the last few decades. Instead of presenting evidence in front of a judge or jury and having them decide the case, the parties involved will present their case to an arbitrator or a panel of arbitrators who decide the case. While this may not seem much different from litigation, several vital differences have impacted the popularity of arbitration.
The car accident arbitration process is a specific application of arbitration used to resolve disputes arising from auto accidents.
Arbitration hearings allow the disputing parties to keep the legal dispute confidential and reach a final resolution without getting tied up in years of appeals. It is also voluntary, which means that the parties have to opt into arbitration at some point, making it impossible for one party to force the other into binding arbitration.
Arbitrators are neutral third parties appointed by the parties or the organization under which the parties have agreed to arbitrate. They are obligated to disclose any potential conflicts that may arise between their own lives and the position of either of the parties and to stop arbitration if an issue arises that may call their independence into question.
What is Arbitration?
Arbitration is a process of resolving disputes outside of the court system. A neutral third party, known as an arbitrator, makes a binding decision. It is an alternative to litigation, which can be time-consuming and costly. Arbitration is often used in car accident cases, employment disputes, and commercial disagreements.
In arbitration, the parties present evidence and arguments to the arbitrator, who then decides based on the information provided. The arbitrator’s decision is usually final and binding, meaning that it cannot be appealed. However, in some cases, parties may be able to appeal the decision if they believe that the arbitrator made an error in their ruling.
Arbitration can be either voluntary or mandatory. Voluntary arbitration occurs when both parties agree to use arbitration to resolve their dispute. Mandatory arbitration occurs when a contract or agreement requires arbitration as the method of dispute resolution.
Examining the Timing of the Arbitration Process
Because each arbitration will have different issues and complexities, the time it takes to arbitrate will vary with the various factors. With the variation, predicting how long an arbitration will take and whether it will resolve faster than litigation can be challenging. However, a thorough understanding of the arbitration process and examining the different factors at each step that may speed up or slow down the arbitration will help create an estimate for the time an arbitration will take.
The arbitration award will often involve seven steps: agreement, initiation, arbitrator selection, initial hearing, discovery, hearing, and arbitration awards. Any of these steps can impact the time it takes, so if time is a goal, it is essential to understand the issues that may arise in each step.
Agreement
Before the actual arbitration can begin, the parties must agree to arbitrate. This can happen in two ways: pre-dispute or post-dispute. Pre-dispute agreements are often contained in a contract between the parties that requires all disputes that arise under the contract to be submitted to arbitration. This is usually called an arbitration clause. A post-dispute agreement is between the parties agreeing to submit the specific dispute to arbitration. In either case, the parties must agree to arbitration to initiate the legally binding process.
This can cause the time of arbitration to slow if one party, such as an insurance company, is reluctant to agree. Still, a pre-dispute arbitration clause will make the process go quickly once a dispute arises because the parties are bound by their agreement to arbitrate. Occasionally, a party may challenge the applicability of the arbitration clause, but courts will usually uphold an agreement to arbitrate unless it was not agreed to somewhat. This challenge may slow the beginning of the process, but it is rare when the parties have a written agreement to arbitrate.
Initiation
Once a dispute arises, such as a car accident case, and the parties have established an agreement to arbitrate, they must initiate the arbitration process. Each arbitration provider has a different requirement for initiating the case. Still, they will generally require that the person asking for arbitration submits a request or demand for arbitration to the governing provider. Several pleadings will need to be submitted to start the process. These are:
- Demand: A demand for arbitration is a formal request to the organization handling the arbitration under the agreement and the other party. This request will begin the process and set any timelines that must be met. It can be served independently or in conjunction with the statement of the claim.
- Statement of the Claim: The party requesting the arbitration will also submit a statement of the claim. This statement will include the harm, the person or entity that harmed them, and what relief is requested. This is usually submitted with the demand for arbitration and served on the opposing party.
- Answer: Once the other party receives the statement of the claim and the demand for arbitration, they have the chance to answer. An answer is a response to the statement of the claim. It will list any defenses to the claim and counterclaims against the initiating party.
Many organizations have timelines for when certain documents need to be submitted, so there is often little one party can do to expedite this process.
Arbitrator Selection
Once arbitration has begun, the parties must have an arbitrator appointed. There are several ways to choose an arbitrator, each with its own set of issues concerning time. The method for arbitrator selection will usually be in the agreement, so this must be considered when drafting the agreement to ensure the fastest process. An arbitrator may be appointed in any of the following ways.
- By the Parties: Many parties, especially individuals or small businesses, will choose to find an impartial arbitrator themselves. This can be through organizations or online searches. Both parties will need to agree on the arbitrator, which can take time if the parties struggle to find an agreeable arbitrator.
- By an Organization: The parties may also choose to have an organization appoint the arbitrator. This can be done under the organization’s armor by simply asking for the organization’s input. The parties must submit a request that often outlines any needed experience or expertise, and the organization will appoint the arbitrator. This can move quickly as long as the parties have a plan for what they need from an arbitrator.
- By a Combination: In some cases, the arbitrator’s appointment will be made through a combination of the abovementioned processes. The parties will submit a request to an organization, which will send a list of possible arbitrators from which the parties can choose an arbitrator.
Choosing a suitable arbitrator can impact the rest of the arbitration hearing and the arbitrator’s decision. Hence, spending more time in the appointment process is often wise if speed is essential overall.
Initial Hearing
In more complex or formal cases, the parties may choose to have an initial hearing. Here, the parties will outline the dispute, familiarize themselves with the process, the arbitrator, and each other, and discuss deadlines for discovery or other issues that must be addressed. This may be relatively quick, but this can be a long process if significant discovery issues or any interim relief needs to be discussed.
Discovery
Discovery is the process of exchanging information between parties. There will often be discussions about what needs to be exchanged and when it needs to be exchanged. This process may take time for complex issues as the parties gather and exchange evidence. However, the evidentiary rules are laxer in arbitration than in litigation, so discovery may move quickly if the parties are prepared and can get the information they need into evidence.
If there are disagreements about how information is exchanged, this process may take longer. The complexity of the case and the timelines the arbitrator sets will often impact the time needed in this phase.
Hearing
Once the discovery process has wrapped up, the parties will participate in a hearing. This is where the parties present their case, and the arbitrator hears the evidence to decide. The party requesting the arbitration often presents evidence first, giving the arbitrator any evidence to support their claim. After this, the other party will present their case and defenses. This process depends highly on the case’s complexity and the parties’ preparation.
Arbitration Award
The final step in the arbitration process is the award. The arbitrator’s decision dictates how the dispute will be resolved. The timing of this depends on the arbitrator and the timelines in place; however, if there is time pressure, the parties could agree to ask the arbitrator for speed and to shorten any requirements.
Once the award is issued, the arbitration will be complete, as most arbitrations leave little room for party appeals unless there was arbitrator misconduct or other issues with neutrality. This guarantees that the overall process will be significantly shorter because any trial will likely have the possibility of appeal, which can extend the litigation timeline way past that of arbitration.
Arbitration vs. Litigation
Arbitration and litigation are two different methods of resolving disputes. Litigation involves taking a dispute to court, where a judge or jury decides. Arbitration, conversely, consists in presenting evidence and arguments to a neutral third-party arbitrator, who makes a binding decision.
Arbitration is often preferred over litigation because it is generally faster and less expensive. Arbitration hearings can be scheduled quickly, and the process is frequently less formal than a court trial. Additionally, arbitration decisions are usually final and binding, which can help to avoid lengthy appeals.
The Cost of Arbitration
The cost of arbitration can vary depending on the specific circumstances of the dispute and the arbitrator’s fees. However, arbitration is often less expensive than litigation.
Here are some of the costs associated with arbitration:
- Arbitrator’s fees: The arbitrator’s fees are typically the most significant cost associated with arbitration. The arbitrator’s fees can range from $500 to $5,000 per day, depending on the arbitrator’s experience and the case’s complexity.
- Filing fees: There may be filing fees associated with arbitration, ranging from $100 to $1,000 or more.
- Attorney’s fees: Parties may need to hire lawyers to represent them in arbitration, which can add to the overall cost.
- Other costs: Other costs associated with arbitration may include expert witnesses’ fees or document production costs.
How Much Does Arbitration Cost?
The cost of arbitration can vary widely depending on the specific circumstances of the dispute and the arbitrator’s fees. However, here are some general estimates of the costs associated with arbitration:
- Simple arbitration: $1,000 to $5,000
- Complex arbitration: $5,000 to $20,000 or more
- Multi-day arbitration: $10,000 to $50,000 or more
It’s worth noting that these are just rough estimates, and the actual cost of arbitration can vary widely depending on the specific circumstances of the dispute.
Conclusion
Arbitration is a valuable resource for resolving difficult disputes. While it usually moves quickly and faster than litigation, there are often other ways that the parties could resolve their dispute faster. However, arbitration’s strengths, such as confidentiality, voluntariness, and finality, often draw parties to the mechanism, and consulting a car accident lawyer can help them feel better about the process’s time. Additionally, if the parties are prepared and have researched, they can help the process move efficiently and ensure the dispute is resolved effectively and quickly receive the arbitrator’s decision.
Contact ADR Times today to learn more about arbitration, how long does arbitration take, and more!
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