What Does Arbitration Cost?
According to a survey by Public Citizen, a consumer watchdog group, the cost of initiating an arbitration is significantly higher than the cost of filing a lawsuit. On average, it costs about $9,000 to initiate a claim to arbitrate a contract claim worth $80,000 (versus about $250 to file that action in state court). Keep in mind that the people in the dispute pay the arbitrators, and arbitration fees can run to $10,000 or more. Add in administrative costs and your own attorney fees (if you hire one) and the process might even cost more than litigation.
7.3. Say whether these statements are true or false:
1. Arbitration is an in-court proceeding in which a judge hears evidence and then makes a binding decision.
2. Binding arbitration means that participants can reject the arbitrator's decision and take the dispute to court.
3. If arbitration is required by law it is called mandatory arbitration.
4. Litigation is usually slower, more complicated and less efficient than arbitration.
5. A binding arbitration ruling can be appealed.
6. Arbitration is a very expensive process.
7.4. Fill in the missing words:
If your contract doesn't have an (1) a...n clause, and a dispute arises you will most likely end up in Court. That means time, expense, legal fees and, in most cases, a result which is less than satisfactory. Arbitration offers an excellent alternative to resolving (2) d...s in Court.
In arbitration, the (3) p...s refer the dispute to one or more persons (the (4) a...r) by whose decision (the (5) a...d) they agree to be bound. It is a process in which the arbitrator reviews the evidence in the case and reaches a decision that is legally (6) b...g and enforceable on both parties.
Arbitration can either be (7) v...y or (8) m...y. (9) V...y arbitration is where the parties mutually agree after a dispute has arisen to submit it to arbitration. At that point, this option is only available if both parties agree. (10) M...y arbitration arises from a written agreement where the parties agree to submit all future disputes to arbitration without necessarily knowing what disputes, if any, will ever occur. This arbitration (11) “c...e” is contained in the parties’ written contract.
7.5. Answer the following questions:
1. What is arbitration?
2. What is the difference between binding and nonbinding arbitration?
3. What are the advantages and disadvantages of arbitration?
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