Arbitration is more formal than mediation and resembles a simplified version of a trial with limited discovery and simplified rules of evidence (e.g., hearsay is generally permitted in arbitration). Before the dispute arises, the parties generally enter into a binding arbitration agreement or other form of agreement with an arbitration clause that allows them to establish important terms and conditions for the arbitration (number of arbitrators, arbitral tribunal; Arbitration Rules; fees, etc.). If the parties still have disputes over certain conditions before initiating arbitration, they can go to court to resolve a dispute. Arbitration may be conducted on an ad hoc basis or with administrative support from one of the institutional providers such as the American Arbitration Association (AAA) or JAMS. The arbitration shall be conducted and decided by an arbitral tribunal or an individual arbitrator, as agreed by the parties. Arbitrators do not need to be lawyers, parties may choose arbitrators in other areas they deem more appropriate to resolve the dispute. For example, parties may choose an arbitrator with technical training to resolve a construction dispute. To form a panel, either the two Parties agree on an arbitrator or each Party elects an arbitrator and the two arbitrators select the third. Arbitration hearings typically last between a few days and a week, and the panel meets only a few hours a day. The panel or an individual arbitrator then deliberates and issues a written decision or award that is enforceable. Opinions are not publicly available. Arbitration has long been used in labor, construction and securities regulation, but is now gaining popularity in other commercial disputes.

Title 9 of the United States Code establishes federal law to support arbitration. It is based on Congressional authority over interstate commerce. Where Title 9 applies, its provisions shall prevail over national law. However, there are many state laws on ADR. Forty-nine states have adopted the 1956 version of the Uniform Arbitration Act as state law. The Act was revised in 2000 and subsequently adopted by twelve states. The arbitration agreement and award are now enforceable under state and federal law. Many disputes are resolved through direct negotiations, often based on the advice of a lawyer, but without formally filing a claim to initiate litigation. In fact, only a small percentage of contentious cases are brought before the courts. Most are resolved through negotiation, mediation, arbitration or other forms of alternative dispute resolution (ADR). In mediation, a neutral mediator supports the parties` efforts to reach an agreement, but does not have binding decision-making power. Arbitration is a relatively informal decision-making process in which the arbitrator`s decision is usually binding.

A wide range of contracts include mandatory provisions for mediation or arbitration, and many court-related programs offer one or more forms of alternative dispute resolution. For more information on how to deal with dispute resolution, check out these related articles: Three Questions About the Dispute Resolution Process – Three Essential Questions You Need to Ask About the Dispute Resolution Process, Make the most of mediation – Make sure your next mediation session is successful with these negotiation skills, Top Ten Trade Negotiations of 2013 – Our Top Ten Trade Negotiations of 2013, The Art of Transaction Diplomacy – Combine the Arts of Diplomacy and Smart Business Negotiation at Your Next Bargaining Table Session After Reading this Article, Capture the Best of Mediation and Arbitration with Med-Arb – Combine Mediation and Arbitration Skills at Your Next Bargaining Table Session and Improve your results. The arbitrator`s award, if rendered in accordance with the arbitrator`s jurisdiction and authority, as provided exclusively in this Dispute Resolution Procedure, shall be final and binding between the parties with respect to any claim that has been or could have been made in connection with the Dispute. This process will be conducted to the fullest extent permitted by the U.S. Arbitration Act. Although the two most common forms of alternative dispute resolution are arbitration and mediation, a dispute is almost always attempted to resolve first. This is the most effective means of dispute resolution. Negotiations allow the parties to meet to resolve a dispute. The main advantage of this form of dispute resolution is that it allows the parties to control the process and resolution themselves. As the Department of Transport strives to achieve its national transportation objectives, we recognize the need for cooperation, to work together in a spirit of cooperation, and to form partnerships internally and externally. The experience of the Department, other federal organizations and the private sector shows that alternative ways of resolving disputes can lead to mutually acceptable solutions more effectively than traditional non-collaborative processes.