Skip to Content

Insights & News

Understanding Arbitration at a Glance

Alternative Dispute Resolution By Harvey Binnall PLLC - 2020/12/01 at 12:37pm

Our Alexandria Business Litigation Attorney Can Help

If you are involved in a business dispute — whether the dispute centers around a breach of contract issue or otherwise — then you may be subject to arbitration as opposed to standard litigation processes.

Arbitration offers an alternative to litigation that is more informal than litigation (but more structured and formal than mediation), but it is not necessarily advantageous in all situations.  In cases where there is a significant resource differential between both parties or a significant difference in other power dynamics, arbitration could lead to undesirable results.

To better understand, let’s take a brief look at some arbitration basics.

Arbitration Basics

Generally speaking, arbitrations are agreed upon in the underlying contract.

For example, if you enter an employment agreement, there may be a clause in the contract that requires that you arbitrate any employment-related dispute with your employer.  The clause will establish certain guidelines for resolving the matter through arbitration.

For example, the arbitration clause may include information on how the arbitrator selection process should be implemented, who is required to pay for fees, and more.  Perhaps the most fundamental issue is whether the arbitration will be mandatory and/or binding.

Mandatory and Voluntary Arbitration

Arbitration can be either mandatory or voluntary.

In mandatory arbitration, the dispute has to go through the arbitration process, whereas in voluntary arbitration, the parties can choose to enter into arbitration (after they have assessed the various alternatives).

Binding and Non-Binding Arbitration

Arbitration can be either binding or non-binding.

This distinction is critical for determining how the arbitration will impact the resolution of the dispute.  In disputes where the clause makes arbitration binding, the decision of the neutral arbitrator will be deemed final (and the court will enforce that decision) and will not be overturned.

Binding arbitration — combined with mandatory arbitration provisions — ensures that arbitration is the only means of resolving the dispute.  By contrast, non-binding arbitration allows the parties to have the arbitrator evaluate their dispute and give a third-party determination as to how the lawsuit should be resolved.  The parties can then either accept the result or base further settlement negotiations on the determinations reached by the arbitrator during non-binding arbitration.

Contact an Alexandria Business Litigation Attorney for Assistance

Harvey & Binnall, PLLC is a boutique commercial litigation firm located in Alexandria, VA, and serving clients throughout the DC metro region.  Our team has extensive experience working with those who have been involved in business disputes, including disputes that necessitate complex arbitration.

We have a client-focused approach to legal representation, and strive to gain deep insight into the case at an early stage — this gives us significant leverage in alternative dispute resolution discussions, such as mediation and arbitration.

Ready to speak to an experienced Alexandria business litigation attorney at Harvey & Binnall, PLLC?  Call (703) 888-1943 or send us a message online to request a consultation.