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How Does Arbitration Agreement Works Compared to Formal Lawsuit

By Edited Apr 30, 2016 0 1

Arbitration is an alternative to formal litigation wherein a neutral person called the arbitrator tries to resolve the dispute between two parties and tries to be fair in giving award money.

Arbitration is effective in cases involving small business conflicts and employment issues. It is cheaper and practical than bringing the case to court. It also has speedier process and fewer requirements. However, evidences and witness statements are still required to hear and weigh both sides.

The decision of an arbitrator is considered final. However, one party may not pursue with the arbitration hearing, and choose to file a formal lawsuit. Issues such as insurance claim, securities, employment issues, antitrust and international business disputes can be settled through arbitration.

The Federal Arbitration Act functions similarly like the various litigation laws. Consumer rights and medical malpractice can undergo arbitration process.

Both parties can agree to enter an arbitration agreement. Such agreement is considered as voluntary and binding as a contract. The contract may include statements on arbitration preference over lawsuit when conflicts arise.

Employers may negotiate with unions to include in the terms and agreement the required arbitration process when issues such as breach of contract occurs. All dialogue such as collective bargaining agreement may contain provisions on arbitration.

The employee must be careful when signing any document with the employer. He or she must inspect all statements if it contains arbitration stipulation. Employers will use this advantage to prevent the high cost of formal lawsuit. Make sure that there are fair

conditions for salary, wage, hour, overtime, severance pay, and retirement benefits.

Should violation occur on labor rights, you have to negotiate first using arbitration process. Issues on safety, security, and other work related problems should be mediated by an arbitrator. In signing an arbitration agreement, you agree not to file a formal lawsuit.

The American Arbitration Association (AAA) settles disputes on business, labor and employment, medical malpractice, and insurance claims. It is a non-profit group and has lawyers and experts in various fields that help parties reach an amiable settlement.

Arbitration agreement is faster than court proceedings because it does not need to undergo "stare decisis" (series of legal precedent principles).

However, arbitrators need to abide with the standards of Code of Ethics for Arbitrators in Commercial Disputes and the American Bar Association.

If you are an employee seeking settlement for wage claim or discrimination, you may first initiate an amiable arbitration settlement. Should your employer reject any effort to settle the matter, and you haven't sign any waiver denouncing your right to sue; you may file a formal lawsuit. Consult a professional Labor rights and employment law attorney in Los Angeles today.



Jun 2, 2010 9:39am
Arbitration Agreements Do Not Work Compared to Formal Lawsuits in some Cases.

One should ask where does repeat business come from for the arbitrating agencies when your dealing with consumer Vs. business disputes... Businesses of coarse. This is not an even playing field. Statistics show these agencies tend to not want to bite the hand that feeds them.

Outright fraud and consumer abuse from dubious companies exsists when a business can run and hide under an arbitration agreement, regardless of the outcome, never to see the light of day in a Superior Courtroom and gain public scrutiny.

In my case it has been nearly 3 1/2 years and 3 arbitrators later, the latest with a record of 40-0 against consumers, stuck with a Flood Car bound by arbitration.

In my profile you can find a link to my YouTube video regarding this ordeal and a personal website with further details.
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