What Is Arbitration in Civil Procedure?

Arbitration is a form of alternative dispute resolution (ADR) where parties agree to submit their disputes to one or more arbitrators, who make binding decisions outside of the court system. It is typically used to resolve commercial disputes and is characterized by its efficiency and flexibility.

Arbitration in civil procedure refers to a legally binding process in which disputing parties agree to submit their conflict to one or more neutral arbitrators, instead of proceeding through traditional court litigation. This mechanism is governed by both federal and state arbitration statutes. Under this framework, parties can choose their arbitrators, who will hear evidence and render a decision, referred to as an 'award,' which is generally enforceable in courts, making arbitration a favored alternative for resolving disputes efficiently.

One key feature of arbitration is the level of confidentiality it affords to the parties, as opposed to litigation, which is a public process. Additionally, arbitration proceedings are generally more streamlined compared to traditional court proceedings. In many cases, the scope for discovery is limited, which can expedite the process significantly, making arbitration an attractive option for businesses seeking to minimize litigation costs and time.

The Federal Arbitration Act (FAA) serves as the backbone of arbitration law in the United States, reinforcing the validity and enforceability of arbitration agreements. Courts have consistently upheld arbitration clauses in contracts, provided they are entered into freely and voluntarily by the parties. Nevertheless, issues concerning unconscionable contracts or public policy can sometimes challenge the enforceability of such clauses.

While arbitration can be advantageous, it is important for parties to understand the potential downsides, including limited avenues for appellate review. Generally, the standards for overturning an arbitrator’s award are very narrow, which can pose a challenge for parties seeking to contest unfavorable outcomes. Thus, the choice between arbitration and litigation should be made with consideration of the specific needs and circumstances of the parties involved.

• 1AT&T Mobility LLC v. Concepcion (2011) - upheld arbitration agreements and preempted state laws that disfavor arbitration.
• 2Gilmer v. Interstate/Johnson Lane Corp. (1991) - established that employment contracts can require arbitration of discrimination claims.
• 3Epic Systems Corp. v. Lewis (2018) - confirmed the enforceability of class action waivers in arbitration agreements.
• 4Allied-Bruce Terminix Companies, Inc. v. Dobson (1995) - emphasized the broad scope of arbitration clauses under the FAA.
• 5Moses H. Cone Memorial Hospital v. Mercury Construction Corp. (1983) - reinforced the principle that federal law favors arbitration agreements.

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