Arbitration

Arbitration

Arbitration is a formalized system of dispute resolution where parties present their arguments and evidence to a neutral third party, who has the authority to make a binding decision. It is similar to formal adjudication, but with limited pretrial discovery and less formal hearings. The rules of evidence are not as strict in arbitration. It can be mandated by law for certain conflicts, such as labor disputes, and can be either binding or nonbinding. Once an arbitration decision is made, there is no default mechanism for enforcing it.

1. Compulsory. Each malpractice dispute would be submitted to arbitration.

2. Voluntary. Each malpractice dispute could be submitted to arbitration, but in contrast with compulsory arbitration, under this category the right to a jury trial is not lost; this applies to both the plaintiff and the defendant.

3. Binding. The arbitration award would be final and binding, with respect to both liability and damage determination.

Arbitration can be considered as a less formal type of adjudication. In some cases, arbitration exists as a quasi-judicial process within a legal system. Contrary to a court system, parties can choose arbitrators who determine the outcome—or, at least accept the authority of the system which appoints the arbitrator. The basic principle is that an arbitrator should be acceptable to both parties. Arbitrators are generally concerned with making a fair judgment of the substantive issues as well as with maintaining formal procedures of hearings and fact-finding. Their decisions are based on presented evidence and arguments. At a hearing all parties present arguments, respond to the other side, and answer arbitrators' questions. Since participants do not make decisions on the outcome, goodwill, trust, and cooperation between parties are not required.