Resolving Disputes wtih Arbitration

If your contract includes a binding arbitration clause, then one of the first steps in the process is to establish which rules will govern your dispute. If you do not know which rules or act will control your arbitration case, then it will be almost impossible to figure out the deadlines you need to meet and where to even start the process. To determine when, where, and how you need to file for arbitration, you will first want to look at the language in your contract or agreement.

Your arbitration clause will often contain language that tells you whether your process will be governed by the rules of a particular organization, such as the American Arbitration Association. If, in your arbitration clause, the American Arbitration Association (AAA) is the controlling organization, then you must familiarize yourself with rules of the AAA in order to be adequately prepared for your arbitration. You will also need to figure out what type of dispute you have - whether it is a consumer case, an employment case, insurance case, or a construction case, for example, because the AAA has specific rules that apply to different types of disputes.

In addition, an individual must determine if the contract and/or agreement that contains the arbitration clause is governed by the laws of the State of Texas under the Texas Arbitration Act

(TAA) or whether the Federal Arbitration Act (FAA) applies. The FAA generally governs the enforceability of an arbitration agreement when the transaction involves interstate commerce. Determining which arbitration rules apply and understanding those rules is integral in successfully navigating the arbitration system.

Settlements

From the beginning of your case and through every point in your case we will try to reach a settlement with the other side, unless you think otherwise. Settlement is favored because of the uncertainties involved in putting your case before a neutral arbitrator whose decision may surprise either side. Often, companies will pay additional money to avoid the uncertainty of a decision or award. In the event that we believe a settlement offer is a good idea, we will get your permission before starting negotiations and mutually agree on a first settlement offer to the other side. When the other side makes an offer to you, we will always inform you of the offer, even if we don't like it. It is not unusual for settlement negotiations to continue for a period of time and for several offers and counter-offers to be made. If you are unhappy with the offer, you can always reject any settlement offer and opt to present your case to the arbitrator.

Starting the Arbitration Process

Once the arbitrator(s) have been chosen, the person who is initiating the arbitration, known as the claimant, must set out a statement of the claim. In the statement of the claim, the claimant should summarize the legal facts that are the basis for the arbitration and it should also offer a remedy for the dispute. This statement should be sent to the respondent, or defendant, in the arbitration dispute. Once the statement by the claimant is received by the respondent, the respondent must issue a response either admitting or denying the claim. In addition, the respondent is allowed to issue a counterclaim to which the claimant will then have to reply.

Arbitrators

Choosing the individual or individual(s) who will serve as the arbitrator(s) in your dispute is arguably one of the most important decisions that will be made in the arbitration procedure. The arbitrator(s) not only renders an award at the end of the arbitration hearing, but they also make decisions throughout the process, such as setting deadlines and granting subpoenas. The binding arbitration clause in your contract will often provide a description on the selection process for your arbitrator(s). In arbitration, there can be either one arbitrator or a panel of arbitrators and your arbitration clause should explain how those individuals are to be selected. For example, the arbitration clause may provide that there should be a panel of 3 arbitrators. One arbitrator is selected by each of the two parties and then the third arbitrator is chosen by the other two. Normally, the parties in arbitration are presented with a list, or roster with the names of arbitrators included from which they then have to choose, and agree upon the presiding arbitrator(s). If you are unfamiliar with the names, experience, and/or prior track record of the arbitrators on the roster, then you are at a distinct disadvantage in trying to select an individual to preside over your arbitration.

Discovery

The discovery portion of the arbitration process is governed by the TAA, FAA, or AAA (American Arbitration Association) rules. Once the arbitration process begins, there are specific time frame requirements that govern when certain actions must be taken. Under the TAA, either party may request that depositions be taken of certain witnesses. In addition, a party can also request a subpoena for documents or that a person appear to give testimony. The discovery phase is another place where choosing your arbitrator(s) is important, since they are the ones who will either grant or deny your request for subpoenas.

Arbitration Hearings

At the conclusion of the discovery process, an actual hearing is scheduled in which the arbitrator(s) will preside over oral statements, witness questioning and review documentary evidence. Both parties are allowed to present evidence and witnesses and each party is also allowed to cross-examine the other party's witness. During the hearing, each party may provide the arbitrator with a summary of their evidence and applicable laws. You can either provide your summary orally at the hearing or in writing. If the dispute can be resolved simply by reviewing the documents in evidence, then an arbitrator may issue an award without a hearing.

Awards

At the conclusion of the arbitration hearing, the arbitration panel will issue an award, which is basically a decision regarding your case. Normally, an award that is made in arbitration cannot be appealed, however, you can file to vacate an award under either Texas or Federal law.