Ohio residents who have applied for credit cards or taken out consumer loans have probably agreed to settle disputes with financial institutions through arbitration. Most large companies include arbitration clauses in their contracts because they can settle disputes quickly, quietly and without going to court, but that does not mean resolving disagreements in this way is a bad idea for individuals or smaller businesses.
Neutral third party
Court proceedings and arbitration sessions are presided over by a neutral third party. In court, this is a judge; during arbitration, it is an arbitrator. Lawyers are usually present in court, and they may also attend arbitration hearings, but they play a different role. In court, attorneys make a case and advocate on behalf of their clients. Arbitration is designed to be less adversarial, so the role of lawyers is limited to offering guidance.
The goal of arbitration is to settle disputes amicably. The parties involved are encouraged to find common ground by discussing rather than arguing over the issues involved. Witnesses may be asked questions, but they are not examined and then cross-examined by attorneys seeking to strengthen an argument or weaken the arguments made by others. Convenience is one of the chief benefits of arbitration. Both the International Centre for Dispute Resolution and the American Arbitration Association provide online dispute resolution services. This can both greatly reduce the cost of settling disputes and speed up the process considerably.
Alternative dispute resolution
The federal rules of evidence do not apply during arbitration hearings. This means arbitrators may allow evidence to be introduced that would not be admitted in court. Attorneys with experience litigating business disputes may explain the advantages and disadvantages of alternative approaches like arbitration and mediation, but they might advise their clients to opt for nonbinding and non-mandatory provisions whenever possible.