Lawsuits explained – Part 7 of 8
In our examination of the third or conclusion phase of a Florida business lawsuit we previously reviewed the informal resolution methods of settlement and mediation. Those are classified as informal because they are often handled by the parties directly. While it is true that a mediation can and often does have a mediator at the helm, that person is not empowered like a judge or arbitrator to make decisions.
Now we will examine the more formal methods of resolving business disputes in Florida, which are arbitration and the trial. We will split these into two sections with the trial addressed in the subsequent entry.
Arbitration can exist as an independent option where parties agree in a contract to resolve certain disputes in arbitration instead of in court. But it can also be used within a lawsuit and can be binding or non-binding and can be by agreement or ordered by the Judge, but a Judge may only order the non-binding variety.
Binding vs. Non-Binding Arbitration
Binding arbitration is exactly as it sounds. A decision entered in that kind of arbitration is final and binding on the parties subject to it. There are no appeals of arbitration awards like the appeal of a judgment from a trial court to an appellate court, but they are subject to review by a trial court if the arbitration awardee seeks to have the court conform the award into a final judgment as the process is called.
In contrast, non-binding arbitration is also just as it sounds; the ruling or award is not binding on the parties and the losing party is free to reject it. Thus, non-binding arbitration as a process for resolving business disputes rests somewhere between the informality of mediation and the formality of a trial because a party can reject the decision and take their case to trial.
Logic leads one to the inquiry of what benefit non-binding arbitration provides if the case can still go to trial. Although the losing party can reject the arbitration award, the arbitration itself can act as an useful dress rehearsal for trial and can show one party that they may not have a chance of winning at trial. That can cascade the dispute into a settlement between the non-binding arbitration and the trial or embolden the winner to proceed to trial knowing that their presentation of evidence has carried the day with an arbitrator.
Can you appeal an arbitration award
In short . . . no, but when the party that wins an arbitration brings its award to a court to convert it into a judgment the court can review the award to verify that the arbitrator was unbiased and that the losing party was afforded due process.
Generally, unless things went horribly awry, the allegation that the arbitrator misapplied the law or made a bad decision is not grounds for attacking or challenging an arbitration award. So while there is no independent appellate body that oversees arbitrators, there is a limited review of the process essentially to ensure fairness because the court perceives that the parties contractually agreed to arbitrate so who is the judge to re-try the case.
Is arbitration better than court
Arbitration is not better or worse than going to court it is just a different venue for resolving a business dispute. Depending on the circumstances of the dispute whether arbitration is useful or beneficial is a decision for you to make with you lawyer. That decision should also be made before you sign a contract that contains a mandatory arbitration provision unless you absolutely know that you want to arbitrate any dispute that it the subject of that provision.
Hiring an attorney who has a depth of experience and knowledge with arbitrations in and outside of lawsuits like Board Certified business lawyer David Steinfeld is highly beneficial. The capacity to fully and properly analyze the situation from an experienced perspective is a great benefit that such a person brings to your team.
The Palm Beach Business Lawyer Blog
Board Certified expert in Florida business law, David Steinfeld has almost 25 years legal experience.