Arbitration is one of several methods used to settle legal disputes outside of the courts. When both parties involved agree to arbitrate, the case is brought before a neutral third-party. This third-party, the arbitrator, reviews evidence and hears arguments from both sides before issuing a decision regarding the dispute. Keep reading to learn more about the arbitrator.
What Does an Arbitrator Do?
When two parties are involved in a legal dispute, there are several ways they can resolve the issue. One option is taking the case to court, but this can be a costly and time-consuming process. If parties wish to avoid litigation, they can use an alternative dispute resolution (ADR), which includes arbitration.
Arbitration can only take place if both parties agree to it. This agreement can occur before or after the dispute arises, and it is not uncommon for a written contract to include an agreement to arbitrate, rather than filing a civil lawsuit with the courts. For example, it has become standard in recent years for credit card companies to include mandatory arbitration in their contracts. This requires customers to consent to arbitration in the event of a dispute.
The arbitration process begins when a party involved in the dispute notifies the opposing party of their intent to arbitrate. The opposing party is then given a timeframe to respond. If they agree to the arbitration, the parties then select an arbitrator, or a panel of arbitrators. When a contract includes an arbitration provision, it may require the use of a particular arbitrator group, or specify how an arbitrator should be chosen.
After selecting an arbitrator, the arbitration hearing takes place. Like court proceedings, both parties make opening statements and present evidence. After hearing arguments from both sides, the arbitrator decides the outcome of the case. In some instances, the arbitrator’s decision is binding and enforceable by the court. Sometimes however, the decision is non-binding and not enforceable. Unlike litigation, which takes place in a public courtroom, arbitration is done in private and both parties can agree to keep the outcome confidential.
Professional Requirements to Become an Arbitrator
Becoming an arbitrator requires a combination of education, training, and experience. For most entry-level arbitrators, a bachelor’s degree is sufficient. The degree does not have to be specific to the field of arbitration or conflict resolution, as most arbitrators obtain a degree related to their field of expertise.
While a law degree is usually not required to become an arbitrator, it does broaden job prospects. Earning a law degree involves receiving a bachelor’s degree, taking the Law School Admission Test (LSAT), attending law school, and passing the bar exam.
Additional Education and Experience
Arbitrators new to the career often work under an experienced arbitrator for a time before working independently. There is also training available through conflict resolution programs and postsecondary schools.
While there is not a national license for arbitrators, some states require certification or licensure for arbitrating certain types of cases. For example, a financial arbitrator may be required to have a bachelor’s degree and be a licensed CPA.
The best way to gain experience as an arbitrator is to work in the legal field, or industry in which you plan to handle disputes. This type of experience is often required for acceptance into organizations such as the This particular organization mandates applicants have at least 10-years of senior level business or legal experience.
Where Can You Work as an Arbitrator
Arbitrators have several options when it comes to employment. They can work with state or local governments, in legal firms, or independently. Arbitrators can also work for corporations. It is becoming more common for large corporations to have in-house arbitrators as they attempt to avoid litigation, especially in the medical and insurance fields.
As of 2017, the median annual salary for arbitrators was $60,670 per year ($29.17/hour), according to the Bureau of Labor Statistics (“BLS”) Occupational Outlook Handbook. Arbitrators employed by the federal government tend to fall at the higher end of the salary spectrum.
Employment Outlook for Arbitrators
The employment rate for arbitrators is projected to grow about 10% between 2016 and 2026 according to BLS. This is slightly faster than the average rate of growth for other occupations in the U.S. More people are using arbitration since it is less expensive and quicker than litigation, which increases the demand for arbitrators.
Hiring an Arbitrator
If you decide that arbitration is the right way to settle your dispute, it is time to start looking for an arbitrator. A fair and effective arbitrator will have arbitration experience, an excellent ability to communicate, strong analytical and reasoning skills, and expertise in the subject matter of your dispute.
While it is not required to use an attorney for the arbitration process, it is strongly recommended. A lawyer familiar with the basics of arbitration can advise you on the process and help you present your case during the hearing.
How to Find the Right Arbitrator
If you have decided to use an arbitrator, you may feel overwhelmed at the prospect of finding one. One great way to begin your search is to talk to a lawyer that practices in the appropriate area of law. Ask the lawyer if he or she has used an arbitrator they would recommend.
If you have already hired a lawyer for the arbitration hearing, they are likely to assist you in your search. You can also check your state’ bar association website as many contain an alternative dispute resolution directory. For a fee, you can also obtain a list of local arbitrators from the American Arbitration Association.
It is important to remember that both parties must agree on an arbitrator. If you are going through an association, they often provide a list of arbitrators suitable to the case and both parties then choose one from the list.
|Degree Level||Bachelor’s degree|
|Degree Field(s)||Field of practice|
|License/Certification||Varies by state – No national license or certification|
|Key Skills||Strong reasoning ability, verbal communication, attention to detail, decisive|
|Number of Jobs (2016)||7,800|
|10% growth rate (faster than average growth rate)|
|Median Salary (2017)||$60,670 per year|
|On the Job Training||Moderate term of on-the-job training|
|Top Earners||Top earners in the field are generally employed by large law firms|
*(Source: the BLS)