FREQUENTLY ASKED QUESTIONS (BINDING AND NON-BINDING ARBITRATION):

1. What is non-binding arbitration?

Non-binding arbitration is a process where a neutral arbitrator hears a dispute and makes a decision, but the decision is not legally enforceable unless both parties agree to accept it. It serves as an “advisory” ruling of what might happen at trial that parties can either follow or reject.

2. How does non-binding arbitration differ from binding arbitration?

The key difference between binding and non-binding arbitration lies in the enforceability of the arbitrator’s decision. With binding arbitration, both parties must abide by the arbitrator’s decision, and it is usually not subject to appeal, except under very limited circumstances. The decision is final and legally enforceable. In non-binding arbitration, the arbitrator’s decision is more like a recommendation or advisory opinion. The decision can be accepted or either party can reject the decision and move to have the decision made in court.

3. Why would parties choose non-binding arbitration?

Parties may choose non-binding arbitration to get an expert opinion on the likely outcome of their dispute without being locked into a legal and binding decision. It can help facilitate settlement negotiations or provide a basis for moving forward.  In certain instances, the court can order the parties to non-binding arbitration to resolve the dispute without need for a trial.

4. Is the arbitrator’s decision in non-binding arbitration confidential?

Yes, like other forms of arbitration, non-binding arbitration is generally a private and confidential process. The decision, evidence, and discussions during arbitration are usually not made public. However, if the decision is converted to a judgment that is filed with the court, the prevailing party can use that decision (judgment) to enforce the ruling of the arbitrator.

5. Can the decision in non-binding arbitration be used in court?

Typically, the decision in non-binding arbitration cannot be used as evidence in court proceedings. The arbitrator’s findings and recommendations remain confidential unless both parties agree to submit them to the court.

6. What happens if one party rejects the arbitrator’s decision?

If one party rejects the arbitrator’s decision in non-binding arbitration, the dispute can proceed to other methods of resolution, such as mediation, binding arbitration, or litigation in court.

7. Is non-binding arbitration faster than litigation?

Yes, non-binding arbitration is typically faster than going to court because it avoids lengthy procedural rules and offers a more streamlined process. However, if the dispute is not resolved through arbitration, further proceedings (like litigation) can be utilized and will likely take more time.

8. What types of disputes are suitable for non-binding arbitration?

Non-binding arbitration can be used for a wide range of disputes, including business and commercial disagreements, employment issues, construction disputes, and insurance claims. It’s most often used when parties want a neutral evaluation of their case without a final obligation to accept the outcome.

9. Do I need a lawyer for non-binding arbitration?

While it’s not mandatory to have a lawyer during non-binding arbitration, having legal representation can help ensure your interests are properly advocated for and that you understand the implications of the arbitrator’s recommendations.

10. Can non-binding arbitration turn into binding arbitration?

Yes, if both parties agree after the non-binding arbitration that they want the arbitrator’s decision to be final, they can formalize it into a binding agreement, making the arbitrator’s ruling enforceable in court.

If you have additional questions regarding mediations and/or arbitrations, please contact us at 786-496-2223 or send us an email to [email protected].