What is Binding Arbitration?
Video Transcript What Is Binding Arbitration? You have a dispute with a business entity and you find out that you are going to be in binding arbitration. Hi, I’m Robert Todd and I’m here to explain what is binding arbitration. Well, binding arbitration is a process by which an independent third party serving as an arbitrator is hired by the institution, which whom you have the dispute, to preside over a hearing or process to decide the outcome. Basically, by agreeing to binding arbitration, you have given up your right to sue in a court of law. Yes, binding arbitration is less expensive, less time-consuming, but there are some pitfalls to binding arbitration. For the most part, binding arbitration usually involves an arbitrator that is picked by the institution or entity with whom you have the dispute. I would recommend, in my opinion, if you have an opportunity between agreeing to binding arbitration or mediation, whereby a neutral third party simply listens to the dispute and helps t
Mandatory binding arbitration is an agreement to have a third party weigh the merits of each side of a dispute and render a decision. That decision is final, and in most cases it can’t be appealed, either to another arbitrator or to a court of law. You give up your right to sue when you sign a contract containing a binding-arbitration clause, and you expose yourself to fees that can run into the thousands of dollars, plus the cost of a lawyer. You lose many of the protections you would have in court. A hearing can be in person or via a conference call. If the hearing is in person, it may be held in another state. If so, you’ll have to pay your expenses for travel and lodging. If you hire a lawyer, you’ll pay his or her expenses, too.More from MSN Money and Bankrate.comGet a better deal . . . with a threat • Are certified used cars worth the cost? • Must car buyers sign an arbitration pact? • Dealing with binding-arbitration clauses • How to say NO! to anything — or anyoneCustomers pre
As an alternative to judges or courts settling disputes between consumers and businesses, binding arbitration works out a deal through an independent, third party body. Binding arbitration may save time, money, and energy when two parties disagree over a contract, the performance of a service, or the exchange of goods. The arbitrator’s decision is final and cannot be disputed or appealed. Increasingly, lenders and distributors are requiring consumers to sign binding arbitration agreements, which might lessen the load on courts yet erode consumer’s constitutional rights. Businesses prefer to resolve claims through binding arbitration because it is more private, avoiding possible bad publicity that could erupt in a trial. They are also not bound to certain legal requirements, such as “discovery” whereby the persons involved in the claim have access to otherwise private information. For everyone involved, a resolution will be offered sooner than it would take a judge or jury. It also save
Mandatory binding arbitration is an agreement to have a third party weigh the merits of each side of a dispute and render a decision. That decision is final, and in most cases it can’t be appealed, either to another arbitrator or to a court of law. You give up your right to sue when you sign a contract containing a binding arbitration clause and you expose yourself to fees that can run into the thousands of dollars plus the cost of a lawyer. You lose many of the protections you would have in a court of law. The hearing could be in person or via a conference call. If the hearing is in person, it may be held in another state. If so, you’ll have to pay your own expenses for travel and lodging while attending the hearing. If you hire a lawyer, you’ll be paying his or her expenses, too. While consumers can represent themselves in arbitration, just as they can represent themselves in court, it’s probably a bad idea, as binding arbitration is usually a one-shot deal. If you make a procedural
