There are two basic ways to resolve a legal dispute in Arizona: through a court proceeding or through arbitration. Each approach has pros and cons depending on the situation. In this post, we discuss how arbitration and court proceedings differ and why parties to a dispute might choose one over the other.
Choice of Adjudicator
In an arbitration, the parties are allowed to select the arbitrator(s). This permits them to choose someone with expertise in the subject matter at issue, which can lead to higher-quality decisions, particularly in complex or technical cases.
In addition, the same arbitrator(s) resolve any disputes that arise before the hearing, which helps them become familiar with the issues involved. By contrast, several judges or magistrates may decide pre-trial disputes in a court case, and the parties do not get to choose the judge who ultimately decides the case.
Time Required For Resolution
The arbitration process is meant to be faster than litigating a case in court, and it often is. However, there can still be an extended waiting period prior to arbitration, depending on the arbitrator’s schedule, and arbitration proceedings themselves can take a significant amount of time. But given the backlog of cases in the Arizona court system, an arbitration diligently pursued by both parties is still probably faster in most situations.
Cost
Although arbitration is often thought to be less expensive than court litigation, this may or may not be true depending on the circumstances. On one hand, filing a court case in Arizona costs around $150 to $200, depending on the court and the type of case. However, in court, there are many procedural hearings and required submissions between the parties that take time.
By contrast, arbitration filing fees can cost several times more, and arbitrators themselves may be paid $1,000 to $2,000 per day. There are various organizations that set flat fees for arbitrations as well as individual arbitrators you can hire who set hourly fees.
Moreover, arbitrations are sometimes conducted far from where the parties are located, which increases travel expenses. However, the parties usually split the arbitration fee. They also are usually allowed to have experts submit affidavits rather than paying them to testify in person, which a court will often (but not always) require. Finally, it often costs less to prepare for arbitration than to prepare for trial.
Privacy
Arbitration proceedings are usually conducted in private, while court proceedings are usually public, and their results are a matter of public record. If the dispute involves particularly sensitive issues, the parties may choose arbitration to avoid unwanted publicity.
Procedural Rules
Courts must follow strict rules found in statutory and case law regarding what types of evidence they or a jury may consider. These rules may keep the parties from presenting certain evidence that they feel is important. Arbitrators have much more flexibility to consider evidence they believe is relevant. They also can set other rules for the arbitration proceeding after consulting the parties, such as limits on how many documents can be exchanged before the hearing, how the parties will question witnesses, and how detailed the award will be.
Moreover, arbitrators are allowed to consider issues of fairness and equity in making an award, rather than just the evidence and the rules of law. This flexibility may be welcome, but it may also result in an arbitrator’s reasoning is somewhat unclear.
Discovery
During the discovery process, the parties are required to provide relevant information or documents to each other. Sometimes non-parties are also involved. This process can be longer, more complex, and more expensive in court cases, but the requirements in court cases are predictable. A party can request additional time/evidence, if necessary, in a court case, and judges will typically grant those requests when a party is diligently pursuing discovery.
In arbitration, while parties are able to fashion their own discovery rules, if one side has a significant need for discovery, the other side may not be willing to agree to enough discovery. Arbitrators may not be as flexible in allowing additional discovery. Further, arbitration cases can also involve significant discovery costs, depending on the type of case and complexity of the issues involved.
Joinder of Parties
In a court case, any person or entity involved in a dispute may be joined as a party. By contrast, no person or entity may be required to bring claims in an arbitration proceeding unless they have previously signed an arbitration agreement. This can result in a situation where there are different decisions by a court and arbitrator if some parties have to go to court while others are required to go to arbitration.
While this is not the most desirable result, Arizona courts have decided that if the parties signed an arbitration agreement, then they agreed that such a situation could occur.
Appeal Rights
Usually, unless otherwise specified in an arbitration agreement, there is a very limited right to appeal the arbitrator’s decision to the courts for review. This means the parties have no recourse if they believe the arbitrator made a mistake. A court decision may be appealed to a higher court, which could result in a higher-quality adjudication.
On the other hand, the parties may want to end the dispute quickly and avoid lengthy appeals.
The Bottom Line
The choice between an arbitration and a court proceeding comes down to the specific facts and circumstances. If the parties want a more private, faster, more relaxed, and possibly cheaper method of dispute resolution in which the rules of evidence are more flexible and they can select the adjudicator, arbitration is probably the better alternative.
If they want to appeal the decision should it be unfavorable, apply stricter rules of evidence, or need additional evidence they do not believe they would be able to obtain through arbitration, a court proceeding may be more appropriate.
Contact Counxel Legal Firm
If you would like to talk to an attorney about resolving a matter through arbitration or in court, contact us at (480) 744-6621 or at request@counxel.com. Don’t forget to check out the good things that others are saying about the services they received from Timothy Coons on Google.
This article is intended for informational purposes only and does not constitute legal advice for your specific situation. Use of and access to this article does not create an attorney-client relationship between you and Counxel Legal Firm. Please contact request@counxel.com or (480) 744-6621 to request specific information for your situation.
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