What Is the Meaning of Arbitration? (Definition & Arbitration Meaning)
Here is the official dictionary meaning of arbitration. It is a noun that means “using an arbitrator to resolve a dispute.” The plural noun version of arbitration is “arbitrations.” This is an example of a sentence using “arbitration.” “The case went to arbitration so that the dispute could get settled.” Going to arbitration refers to submitting a dispute to an arbitrator. Let’s continue by going over the basics of arbitration. This will help you gain a better grasp of its meaning. Please visit How To Use Arbitrate in a Sentence.
The Basics of Arbitration as a Word & Alternative to Court
Arbitration always functions as a private process. It’s where parties involved in a dispute agree to settle their differences. This happens by having one or several people make crucial decisions about a dispute. These people, the arbitrators, analyze evidence and arguments. Arbitration is not the same as mediation. That’s because a mediator does not have much authority. He or she can never make a binding decision. That is not the case with arbitration. Neutral arbitrators have the authority to make lasting, binding decisions. Know about Arbitration Definition Economics.
The arbitration process functions very much like a US court trial. That’s because the parties provide opening statements and display evidence. The arbitrator sits back and analyzes the statements and evidence. Arbitration almost always concludes faster than court trials. But that’s not it’s only advantage. When it comes to the arbitration process, it isn’t as formal as court litigation is. Here’s an example. Arbitrating parties do not need to adhere to federal and state rules of evidence. Visit Sample Arbitration Clause.
An arbitrator provides an award once a hearing is over. Some of the awards do little other than announce the arbiter’s decision. This refers to a “bare bones” award. Other awards come with specific reasons why an arbitrator made the decision. This concept gets called the “reasoned” award. An arbitration process functions in either a binding or non-binding manner. Non-binding arbitration isn’t as common as binding arbitration. When arbitration’s binding, the arbitration tribunal decision is final. It can get appealed under very limited circumstances.
What Is the Meaning of Arbitration in Law?
Arbitration in law functions as a private dispute resolution procedure. Say that a dispute or conflict gets submitted for arbitration. (This can only happen if both parties agree to arbitration.) One or more arbitrators then create a binding decision to resolve the dispute. Most parties enjoy arbitration because information gets kept from the public. That is not the case with standard US court litigation. Know about Arbitration Decision Process.
What Does Arbitration Mean from the Dictionary in Simple Terms?
Arbitration focuses on solving a conflict in a private setting. The people on both sides of the conflict get referred to as “parties.” These parties must agree to seek arbitration instead of going to court. The main reason is to save money and time. Arbitration is not that different of a process than any standard court case. But it’s less formal and there aren’t as many strict legal rules at play.
What Is the Purpose of Arbitration?
The goal of arbitration is to secure a fair resolution that solves a dispute. An impartial third party must resolve an arbitrated dispute. That third party plays the role of the arbitrator. Sometimes a tribunal of arbitrators presides over arbitrated hearings. Parties must agree to certain terms about how their dispute gets resolved. US courts never interfere with the arbitration process. What is Binding Arbitration Clause.
Who Appoints the Arbitrator Before Arbitration Hearings Begin?
Disputing parties get an equal say in appointing arbitrators. Most arbitration agreements feature three-member arbitrator tribunals. Each party appoints one of the arbitrators. Then, the parties must agree on who the third arbitrator is. That third arbitrator serves as the President of the Tribunal. Say that disputing parties fail to agree on who the arbitrator is. This means a third-party arbitration organization might need to step in. That organization can then appoint a neutral third arbitrator. Know about the Arbitration Agreement Meaning.
Who Pays the Arbitration Costs?
Parties almost always split the costs and fees of arbitration in an even, 50/50 manner. But that doesn’t apply to the costs of lawyer fees. Parties pay their lawyers on their own. Say an arbitrator has to pay for a certain expense. The parties should split whatever cost that is. Terms of arbitration costs often get featured inside an arbitration clause or agreement. Must visit Arbitration vs Mediation vs Litigation.
More About the Meaning of Arbitration
Let’s continue going over what the meaning of arbitration is. Arbitration is a unique ADR process. ADR stands for alternative dispute resolution. Through arbitration, two parties in a dispute use an arbitrator to reach a resolution. An arbitrator cannot preside over a hearing unless he or she is impartial. Sometimes an arbitrator is one person. Other times, three arbitrators serve on a tribunal, which is a team of arbitrators. Visit Pre Dispute Arbitration Clause.
The word “arbitrate” means to engage in arbitration. Here is an example in a sentence. “If we can’t reach a decision, we will have to arbitrate.” “Arbitration” often refers to the context of negotiations. For example, many labor unions and businesses arbitrate their disputes. They do so at arbitration hearings. Hearings often begin when two parties realize that they cannot reach common ground. Checkout Final Offer Arbitration.
The Arbitration Process Is Consensual
What is Arbitration contract? Arbitration only happens once both parties agree to take part in the process. Say that a future dispute arises that relates to a contract. Parties must assess the arbitration clause features inside the contract. Many disputes go to arbitration when parties submit an official agreement. Once binding arbitration takes place, parties cannot withdraw from the process.
Parties Get To Select Arbitrators Before Arbitration
Say that parties want a hearing to have a sole arbitrator. The parties can select that arbitrator together. This concept still applies if parties prefer to use a three-member arbitral tribunal. Each party will appoint one arbitrator. They then must agree on who the third arbitrator is. If they can’t decide, a neutral arbitration organization will assist. That organization will select the third arbitrator for the tribunal.
The Arbitration Process Is Neutral
Parties have a lot of power in ensuring that arbitration terms remain neutral. That neutrality must apply to both parties in an even manner. Here is an example. Parties can choose which exact state or federal laws connect to the dispute. They can also select a neutral venue for arbitration. This way, a party cannot benefit through having home court advantages. Read 8 Advantages of Arbitration.
Arbitration Is Confidential & Private
Arbitration exists to protect the legal privacy of all parties. This applies to all disclosures that take place during arbitration hearings. It also focuses on ensuring that arbitration award terms always remain private. Privacy benefits both individuals and companies in many ways. Meanwhile, a public court case can expose all sorts of secrets and dirty laundry. Checkout Mandatory Arbitration Provision.
Arbitral Tribunal Decisions Get Enforced With Ease After Arbitration Hearings
Every arbitral tribunal decision gets enforced in a simple manner under US law. This applies to both national and international disputes. Ease of enforcement has been the case for many decades. The arbitration process remains protected in all fifty states. In fact, most countries in the world have laws that uphold arbitration.
The Arbitrary Nature of “Arbiter” & “Arbitration” as English Words
Let’s now go over the meaning of arbitration by analyzing the history of some terms. Many English words used in the 21st century have Latin roots. One single Latin word can create many words. Some of these English words maintain the original meaning. Other words take on new meanings. Let’s use the word “arbiter” as an example. You can trace its Latin roots and find that it had the same spelling many years ago. But spelling is not the only concept that remains the same to this day. Check out Types of Conciliation.
The Latin root for “arbiter” meant an onlooker or eyewitness. But that’s not all. It also referred to someone that got appointed to resolve a dispute. Many English words originate from the Latin form of arbiter. Lots of the words relate to working as a judge or judging something. Even today, an arbiter functions in the role of a judge. After all, “arbitration” itself refers to the act of judging. Arbitration also means to work as an arbiter.
Questions About a Different Word? Let Us Know
Please let our organization know if you need another arbitration definition. Or, if you want to know what other English legal terms mean. Sure, you can use an English dictionary. But one dictionary, like Collins, might have a different definition than another dictionary. (Like a Cambridge, IP, or Taft English Dictionary.) That’s why you’re welcome to message or email us any word that you’d like. We can use our resources and services to assist you in your search. Sometimes the convention of one word that you read might differ from another. But you see, that’s where our association’s services come into play.
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If you’d like to discover more about arbitration and its meaning, our experts are here to assist. They’re only an email, message, or phone call away. We’d love to answer any question that you have about the arbitration process. Also, we have many more free articles about arbitration on our website. You’re welcome to browse them right now. Our team looks forward to educating you more about the basics of arbitration. Check out Interest Arbitration Services.