Arbitration rules are the practices, procedures and requirements governing arbitration, a method of alternate dispute resolution (ADR). Plaintiffs and defendants, referred to in arbitrations as claimants and respondents, generally agree to settle their differences through arbitration before any dispute arises, without knowing the nature of such disputes, if any. Such arbitration clauses are frequently found in collective bargaining agreements, private employment contracts, and contracts pursuant to major consumer purchases such as automobiles and cellular telephone service. Usually voluntary but in some jurisdictions required by legislation, arbitration is an ADR in most jurisdictions worldwide. Arbitration rules, however, may vary widely from one jurisdiction to another, and even within the same jurisdiction.
Especially with respect to consumer contracts such as automobile leases and purchases, and cell phone agreements, the fact that arbitration is an alternate to conventional litigation doesn’t mean it’s necessarily easy. Arbitration rules exist to make the process more easily manageable by the layperson, so that hiring an attorney isn’t an automatic necessity; nevertheless, depending on the value and costs involved, the prudent consumer may find it justified to engage professional representation when engaged in arbitration.
When parties to commercial contracts agree to binding arbitration as the means of dispute resolution, they also name a forum, generally a professional arbitration association, under whose auspices all arbitrations arising from the contract will take place. Naming the forum binds the parties to the arbitration rules of that organization. These rules can sometimes be quite specific; for example, after an arbitration has been requested, but before the hearing takes place, an arbitration management conference is usually called for, at which will be determined all sorts of administrative issues like the place, date and time of the hearing(s), the need for a stenographic record, and whether the arguments will be submitted orally or in written form. The arbitration management conference also deals with such substantive matters as the actual issue(s) being arbitrated, the nature of relief sought, stipulations as to facts, the extent and nature of documentary evidence presented, and the allocation of costs. Some arbitration rules go so far as to specify that the arbitration management conference isn’t required to be face-to-face, but may be a telephonic conference call.
Arbitrators are generally required to be impartial, and rules regarding ex parte communications with arbitrators are every bit as strict as those covering such communications with judges. It’s interesting to note, though, that some arbitration clauses name specific arbitrators, and many arbitration rules provide that arbitrators so selected need not maintain the same level of impartiality. While this may seem counterintuitive, it’s sometimes beneficial to the relationship, as in the case of collective bargaining agreements of many decades standing, that there be a finite panel of arbitrators who, over time, develop a deeper sense of the dynamics of an organization and its relationships than could be achieved by an arbitrator selected on a one-time-only basis.
In addition to addressing administrative issues and the impartiality expected of arbitrators, arbitration rules also set forth standards for testimony and evidence. For example, witnesses giving testimony in an arbitration proceeding are subject both to examination and cross-examination, just like a regular judicial proceeding. The level of formality expected within a courtroom is much lower, however, and the examination and testimony is often conversational in nature. In addition, the arbitrator may take a more active role in examination and cross-examination than might be expected of a judge in a courtroom setting, and is given much wider latitude than a court in terms of how the evidence presented is viewed.
Arbitration rules are designed to make arbitration an appealing alternative to judicial resolution of differences arising from the interpretation and execution of contracts and other agreements. While there’s controversy over the efficacy of arbitration under certain circumstances, such as consumer contracts, the fact is that literally thousands of disputes are settled more or less amicably every year through arbitration, without the costs or delays so common to lawsuits.
