How Arbitration Works Usually, the parties agree to follow the arbitration rules of an agency. These rules define how an arbitrator will be selected, how the case will proceed, and what fees are involved. After that, an arbitration hearing is held, often in the arbitrator s office. Each side presents witnesses and other evidence, and is allowed to question the other side s witnesses. Then the arbitrator renders a decision.
Most people find arbitration less costly, faster and less stressful than a formal trial.
A different type of arbitration is available through the courts, where arbitration is sometimes mandatory to certain types of cases. The local courthouse can tell you if arbitration is mandatory in your case. In these kinds of cases, the arbitrator s award is not necessarily final and binding, because a party who is dissatisfied has the right to request a new hearing before the court. But this new hearing will require extra expenses, and if the party who appeals doesn t do better at trial, that party is required to pay the other side s expenses as well. As a result, the arbitrator s decision is usually accepted by both parties.