Arbitration - Part I

A. The Arbitration Process

1. As opposed to mediation, arbitration results in a binding or non-binding decision of the dispute.

2. The arbitrators consider the evidentiary presentations of the parties and then render an award, which may then be confirmed by a court of competent jurisdiction.

B. Arbitration Agreements

1. The following is a sample clause for the arbitration of all future disputes between the parties before the American Arbitration Association (AAA):

Any controversy or claim arising out of or relating to this contract, or the breach thereof, shall be resolved and determined by binding arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator(s) shall be entered in any court having jurisdiction thereof.

2. Arbitration through the AAA for existing disputes may be accomplished by use of the following agreement, independent of any contract in question:

We, the undersigned parties, hereby agree to submit to binding arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules the following controversy: (describe dispute). We further agree that we will faithfully observe this agreement and the rules, that we will abide by and perform any award rendered by the arbitrator(s), and that a judgment of any court having jurisdiction thereof shall be entered on the award.

3. To expedite matters, any arbitration clause can expressly adopt the summary procedures of Chapter 51, Florida Statutes, or customized summary procedures set forth in the clause itself. The arbitrators and the administrator of the proceeding are mandated to comply with those procedures.

4. The arbitration clause may provide for emergency interim relief by incorporating the AAA’s optional rules for emergency measures of protection or other applicable emergency rules, such as applicable Florida Rules of Civil Procedure.

5. Arbitration clauses may also expressly provide for:

a. The number of arbitrators;

b. The specific minimum qualifications for the arbitrators;

c. The method of and responsibility for payment for the fees and costs associated with the arbitration;

d. The locale for all hearings and the use of any discovery tools, including depositions under the Florida Rules of Civil Procedure;

e. Any other item of concern to the parties.

6. The Arbitration Administrator.

a. It is not necessary to require an arbitration (or mediation) to be administered by the AAA or that the proceeding be governed by its rules.

b. The Florida Rules of Civil Procedure include arbitration rules and most experienced arbitrators (and mediators) are prepared to administer any arbitration (or mediation) themselves. Any qualified dispute resolution organization or individual may be named as the administrator.

Notes:

Arbitration is especially appropriate in industries which require specialized knowledge for their resolution. The parties can require a minimum number of years experience in the industry or other qualifications, such as board certification or specialized licensure.

The above clauses may be rendered unenforceable for any claim asserted pursuant to statutory rights, such as Truth-in-Lending or employment discrimination claims, if payment of any arbitration fees would be unduly burdensome so as to deny the statutory rights in question. See, e.g., Green Tree Financial Corp. v. Randolph, 531 U.S. 79 (2000).

In the interest of complete candor, the author discloses that he is a member of the American Arbitration Association's commercial, financial and employment arbitration and mediation panels.