“ALTERNATIVES to TRIAL”
The courts have long struggled to keep pace with ever-increasing caseloads. In the mid-1980s, if civil litigants wanted to have a judge or jury decide their case, it was not unusual to wait five years to see the light of a trial courtroom. Many courts in California were in crisis and simply could not handle the burden.
The solution came in the form of a paradigm shift in the way we resolve legal disputes. The courts and lawyers began turning to trial alternatives, such as arbitration, mediation, special referees and judicial references. As a collective, these procedures are referred to as “Alternative Dispute Resolution” (ADR).
ADR’s sudden growth in popularity and acceptance, took tremendous pressure off the courts at a critical time. Now ADR is vigorously encouraged by the court system and is endorsed by both state and federal statutes. However, one should not believe that this endorsement means that ADR procedures are in all ways equal to a court trial. There are important differences that directly bear upon your constitutional rights, and the decision to proceed with ADR should not be taken lightly.
A full discussion of all ADR procedures is not possible here. Instead, this article focuses on what is perhaps the most common of these alternatives—arbitration. This is the procedure of presenting your legal dispute to an agreed-upon or appointed professional outside the courtroom. This arbitrator is typically not a sitting judge, but is a professional who possesses legal dispute resolution skills.
The arbitration can be either “binding” or “non-binding.” Binding arbitration means, most importantly, that the decision (in the form of an “arbitrator’s award”) is final in that there is no right to appeal. This is an important characteristic, since even an obvious mistake, misapplication of law or misinterpretation of fact by an arbitrator will not be overturned by court review, absent fraud or profound dysfunction in the arbitration process.
Arbitration is usually binding only if the parties have agreed in writing, in advance. Typically, such “arbitration clause” is included as but one provision in a larger contract for goods or services. However, it is very important to know that the contract arbitration clause does not have to specify that the arbitration is binding. Generally, if the parties agree to arbitrate, their arbitration will be deemed binding unless the contract language specifies that it is to be non-binding.
Another important thing to understand is that by agreeing to arbitrate, one gives up a fundamental and very valuable constitutional right—the right to a trial by jury. The jury is, in my personal opinion (and in the minds of our founding fathers and countless legal scholars), the single most powerful and effective engine of truth and justice that we as a society have ever devised. To give up the right to a jury should not be taken lightly.
The benefits of arbitration are also very weighty and profound. Arbitration is usually much faster and less expensive than the process of trial. The process does not typically require the parties to submit to the strict procedures of trial evidentiary presentation or admissibility. The arbitration process is not public. It is private and is structured and conducted as the parties agree.
Once completed, the arbitrator’s award is typically submitted to a judge in superior court to be affirmed and entered as an enforceable judgment under California state law. If it is non-binding, the arbitrator’s award may be accepted or rejected by either party by timely notice, with certain legal consequences not important for this brief discussion.
If faced with the decision of whether to proceed with or agree to accept ADR, one’s decision is always important. Unfortunately, the decision often must be made on the spot, forced upon us by a medical form or other small-print contract. The best one can do is to take the time to read the wording carefully. In some cases, these form contracts may specifically allow you to change your mind by giving notice within a specified time after signing. If you agree to arbitrate but have second thoughts when something goes wrong, such notice procedure may afford an opportunity to reconsider and rescind such agreement to arbitrate.
As with all legal matters, it is sometimes best to consult a legal professional when faced with the decision to elect or reject ADR. Likewise, whether to include or agree to an arbitration clause in your own business contracts is a complex decision with real fiscal and practical consequences. Look at the alternatives, consider the effects, and be mindful of your objectives. Seek professional advice to resolve doubt or uncertainty. If you do these things, you are “making the law work for you.” Best wishes.
Robert N. Ives, Esq., Ives & Associates
105 Avenida de la Estrella, Suite 2B
San Clemente, California 92672
949.366.6677 | Email: Ives@IvesLegal.com