Cost of Arbitration

The Cost of Arbitration: Going Cost by Cost Through the Arbitration Process

The cost of arbitration will vary depending on the unique terms of each legal dispute. Say that you choose to arbitrate with our association. In that case, there's no exact figure that we can provide. It depends on the different costs associated with your dispute. That’s why you should contact our organization. Our experts can assess the potential costs of any type of legal dispute. Contact our Arbitration Agreement Association for complete Arbitration help.

The Cost of Arbitration Varies Case by Case

An amount paid toward a case gets based on several different factors. The first document to analyze is your arbitration contract or agreement. It might mention what the opposing party will pay for. The contract might also state if arbitration must proceed through a certain organization. Total arbitration costs also depend on how much money a party seeks. This refers to the arbitration award.

Speed is another factor when it comes to the cost of arbitration. Say your arbitration hearings are over after a few days. You’ll save money compared to other cases that might take weeks. The rate of an arbitrator is another factor. Some charge a day by day rate and others charge a rate by the hour. You're welcome to contact our association for specific information. Our team will help you figure out a realistic estimate of the costs. Check out Pre Dispute Arbitration Clause .

The Two Types of Arbitration Costs

There are almost always two central costs related to arbitration. First, there are the administrative fees. These fees go toward an arbitration association like ours. Then, there are arbitrator compensation fees. Compensation fees refer to expenses paid toward an arbitrator. (The arbitrator is the person who must decide the claims of your case.) Say that you proceed with arbitration through our organization. In most cases, we’ll collect both of the costs. Then, we’ll provide the arbitrator (or arbitrator tribunal ) with compensation. Now, let’s go over the two types of arbitration expenses.

Arbitration Cost #1: Administrative Fees

So, what are administrative fees in arbitration? They often refer to filing fees and hearing/final fees. Say that one party files an official claim against an opposing party. That’s when most filing fees must get paid. Sometimes filing fees refer to an exact (fixed) amount. In other cases, filing fees get decided based on a proposed amount of money in a claim. Check out Advantages of Arbitration .

Let’s now go over the hearing/final fees of arbitration. They get paid when cases proceed toward an evidentiary hearing. These fees can get paid in advance of the first scheduled arbitration hearing. At the first hearing, the parties will meet with each other. Or, they’ll communicate over the phone or through a videoconference. This is when the parties will begin presenting their cases to an arbitrator. Now, say you're taking part in "documents only" arbitration. That means you almost never will have to pay a hearing/final fee. Know about Arbitration Agreement Meaning .

Arbitration Cost #2: Compensation for the Arbitrator

An arbitrator is a neutral individual that will decide your case, sort of like a courtroom judge. The arbitrator does not work for our organization. Instead, he or she gets paid by the disputing parties in an arbitration case. The amount of compensation given to an arbitrator will vary. The rate depends on how much work the arbitrator must put in on the case. Each arbitrator gets paid based on an exact rate for compensation. The rate can vary based on the unique arbitration rules and terms of the case. Sometimes an arbitrator sets up a fee or rate schedule with the disputing parties. There are arbitrators who have a per hour rate. Others use either a per hearing rate or per day rate. Know about Types of ADR .

Say that our association’s administering your case. The parties can submit the arbitrator compensation to our organization. They can do so ahead of time. This way, each arbitrator gets paid at once for the work on a case. Our organization can send the compensation to your arbitrator. Say that your case concludes before all the money gets used. We can then refund the leftover money to the parties that paid it. Our experts recommend that you talk to your case administrator about compensation. Or, you're welcome to contact our association with questions at any time. Please visit Interest Arbitration Services .

The Expenses of an Arbitrator

With most cases in the arbitration process , arbitrators do not have to pay for their expenses. But say that your arbitrators must travel long distances to go to hearings. That’s when parties might have to pay for some arbitrator related expenses. This can include meals, travel time, and hotel room fees. It can also even include plane tickets and other expenses. Keep in mind that these fees are not common. Most disputing parties use local arbitrators. This way, the arbitrators are within a short radius of the hearing room. Say that an arbitrator must pay for the expenses mentioned above. Parties then have to pay the total amount. That amount cannot get refunded. What are Types of Conciliation .

Other Costs Related to Arbitration

Must visit Binding Arbitration Agreement . Sometimes there are other costs that parties must pay. They can get paid before, after, or during arbitration. These include abeyance fees and hearing room rental fees. There are costs that parties must sometimes spend to prepare to present each case. No exact rate for hearing room fees exists. The rates vary based on the location and size of the room. Do you want to rent a local hearing room approved by our organization? If so, you're welcome to contact us at any time. You can also talk to your case administrator about renting a certain hearing room. Of course, parties can use hearing rooms that aren’t approved by our association. But the parties must make arrangements on their own. Contact us for Full Scale Arbitration Services .

Our organization sometimes must charge abeyance fees. We can do so when parties delay a case for over a year. Say that a fee isn’t paid. That’s when a case gets closed. Every party must pay certain legal costs, as they would in any US court. These costs refer to attorney fees, witness costs, and the cost of witnesses traveling. There are sometimes costs for presenting or copying exhibits. Every party pays its own costs when conducting each case. Also visit Binding Arbitration Clause .

Recovering Costs Through the Arbitration Award

Keep in mind that many parties do not encounter every single factor listed above. Arbitration costs (and the amount of costs) vary based on each unique case. Every cost can also vary because of certain rules that some parties must follow. Say that your party pays for certain costs written above. You can make a request with the arbitrator. Your party can ask the arbitrator to award those costs. The arbitrator might do so as part of the final award. This refers to requesting an arbitrator to make another party pay back some costs. It’s then up to an arbitrator to decide what to do. Some arbitrators will award certain costs listed in the contract of the parties. An arbitrator will review relevant laws when deciding whether to provide reimbursement. Also visit Arbitration vs Mediation vs Litigation .

Who Pays for the Cost of Arbitration?

Parties split many costs of arbitration in a 50/50 manner. Once again, this refers to a cost like an abeyance fee or hearing room rental fee. Of course, the terms of a contract or agreement might dictate the division of costs. Plus, there are costs that parties must each pay on their own. This can refer to the costs parties spend when preparing to present their cases. It also includes attorney fees and legal costs. Visit Mandatory Arbitration Provision .

Do I Have To Pay for Arbitration?

In the majority of cases, each party must pay certain arbitration fees and costs. But that’s not always the case. Let’s use California arbitration law as an example. In California, employers must pay the total costs of arbitration. This refers to employment/employer disputes. But most of the time, you will have to pay some costs after you decide to arbitrate. Visit here: Arbitration Definition Economics

Is Arbitration More Expensive Than Mediation?

Yes, on average, arbitration is more expensive than mediation. But that’s because of the benefits that arbitration provides. Through mediation, a mediator cannot enforce a binding decision. Instead, a mediator can only suggest the final outcome of a dispute. That’s not the case with arbitration. An arbitration award or decision has legal binding status. This means that US courts will enforce every arbitration decision and award. Because of the legal nature of arbitration, it’s often a little more expensive than mediation. Visit Arbitration vs Litigation .

Arbitration Is Cheaper Than Litigation

Arbitration is almost always cheaper than resolving a dispute through US court litigation. There are many reasons why arbitration is less expensive on average. One key reason is that arbitration is not as formal as litigating in court. This means that there’s a limited discovery process. Thus, processes like depositions and document productions become more simple. Sometimes discovery isn’t even needed during the entire arbitration process. Visit What is Binding Arbitration Definition .

Again, the exact arbitration costs depend on the rules that parties select. You can find those rules in the average arbitration clause or arbitration provision . Most clauses and provisions get placed inside large contracts. This way, parties can refer to official rules when a dispute takes place. The arbitration hearing process is very fast. And saving time leads to saving money. After all, many lawsuits and appeals processes can drag one or years. But most arbitration hearings conclude within a few days to a few weeks. Plus, the losing party cannot appeal an arbitration decision or award. The lack of appeal prevents parties from having to spend more money in the future. Know about Basics of Arbitration & Litigation .

Do You Have Questions About Arbitration Costs? Contact Us Now

Our organization’s ready to answer you questions about the costs of arbitration. All you've got to do is pick up the phone and call our number. You're also welcome to email our experts or message them on our website. They can assess the unique terms of your dispute and help you estimate potential costs. We look forward to helping you succeed through arbitration. Check out: Final Offer Arbitration .