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Define and Explain Arbitration: Understand the Benefits...To accurately explain arbitration you first have to understand alternative dispute resolution.If settlement negotiations fail with the insurance company, you'll have to decide if you want to pursue the matter in a more formal setting. Arbitration is a good alternative. While not officially a court setting, an arbitration forum can set a legally binding decision and force action on your case. Definition of Arbitration - when both parties in a dispute agree to appoint a third party to review the case and impose a decision which is legally binding for both sides. The first benefit of arbitration is the money. You can be awarded any sum of money in this process, since there are no state limits. If the small claims court limits are too low, and the costs of a formal court case are too high, arbitration might be best for you. Filing for arbitration is also relatively inexpensive. The fees aren’t much higher than small claims court and are much less than a formal trial. In the proceedings the arbitrator will do their best to explain arbitration and guide you through each step. Unlike a small claims court judge, they aren’t in the position of having to rush through a few dozen cases in a day. Also, since they’re hired on an hourly rate, they won’t mind if the arguments are long-winded. Because of this you may find times when you're involved in a structured, yet somewhat open discussion with the defendant. While some forms of arbitration do run the risk of leaving you with nothing, there are ways to arbitrate so you receive a guaranteed payment. In these cases, both sides present an offer before the hearing. The arbitrator then decides on one offer. They aren’t allowed to award anything other than one of those pre-arranged sums. This is usually referred to as High/Low Arbitration. Because the arbitrator can’t stray from either figure, both sides will always be making their best offer. Imagine if the insurer didn’t offer their highest possible settlement. If their offer is clearly far lower than the necessary damages, the arbitrator will have no choice but to choose your amount...but the same goes for you. If you choose a figure that's thousands of dollars above what's realistic, the arbitrator won’t be able to justify it. They can’t split the difference and will have to go with the insurer's amount. To explain arbitration benefits clearly, understand that both sides present their best offer, so you're guaranteed to walk away with something. If it’s a choice between settling or going to a high/low arbitration hearing, you can’t lose by choosing the latter. Return from Explain Arbitration to How to File a Lawsuit Return from Explain Arbitration to Personal Injury Settlement Guide How Much Is Your Case Worth? Find out NOW! Complete this form for a FREE case review by an experienced attorney... The accuracy of information on this site is not guaranteed. Information on this site is strictly opinion and should not be considered formal legal advice. Under no circumstances should the information on this site be used to make decisions about the proper course of a legal matter. Click below to read our full User Agreement, Disclaimer and Copyright Information.
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