The first issue to address in arbitration is whether you’re legally bound to proceed to arbitration. Don’t minimize this issue. Unless it’s mandatory, you may want to consult with an experienced New Jersey arbitration attorney to evaluate whether arbitration is in your best interest. For example, I frequently recommend against arbitration if I can opt out for the reasons listed on the following page, “Advantages and Disadvantages of Arbitration.” If I have to go to arbitration, I will seek to build in as many safeguards as possible to maximize any upside and minimize any downside.
Which Arbitration Association Will Govern Your Case
Most parties generally use the rules and procedures offered by the American Arbitration Association (“AAA”). AAA publishes its rules, procedures, fees, and guidelines online for all to read. In recent years, JAMS/Endispute and other arbitration organizations have offered services similar to those of AAA. The parties, however, are not bound to use any formal organization or its rules and procedures unless contractually required by a pre-existing, signed, written agreement. If both sides agree, the parties can select a mutually acceptable, independent arbitrator who will preside over the arbitration and draft his/her own guidelines, which will be binding on the parties and the arbitrator. There are many qualified professionals, including retired judges and industry experts, who can also serve as arbitrators. This may be less costly than using an Arbitration Association. Once you select the association that will govern your proceeding (assuming you go this route), you will be given a menu of arbitration rules and procedures by that association to govern your proceeding if your contract or binding arbitration clause does not specify the rules and procedures to be applied, depending on the type of case being arbitrated.
Within each section of the applicable rules and procedures of each association are a detailed description of how the arbitration proceeding will be conducted including the order of submissions, types of submissions, selection of the arbitrator(s), claims and defenses, jurisdiction over the parties and witnesses, discovery procedures including any limitation of discovery and exchanges of information, attorney-arbitrator conferences, attendance at hearings, use of experts and any limitation on the use of experts, the conduct of the proceedings, use of evidence or waiver of the rules of evidence, inspections and investigation of evidence, final closing remarks and/or final submissions, scope of the award, compensation of arbitrator, etc., and a schedule of fees charged by the association.
The applicable rules and procedures outlined above are general in nature, not overly detailed, and can sometimes leave open potential questions and issues that frequently lead to conflicts between counsel, thus putting the impartial arbitrator in a quasi-judicial role to referee the disagreement(s) but ultimately deciding the issue(s) if no agreement can be voluntarily reached. Thus again, the importance of selecting a good arbitrator and precisely defining the scope and limitations of an arbitrator’s authority cannot be overemphasized.
You should carefully consider using an experienced NJ arbitration attorney to draft the arbitration language for your contract, or, if it’s not too late, to represent you before the arbitration proceeding. To contact an experienced NJ arbitration attorney, call Fredrick P. Niemann, Esq. at (732) 863-9900 or email him at fniemann@hnlawfirm.com.
Fredrick P. Niemann Esq.