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How to Select an Arbitrator

An important benefit of arbitration is being able to select a neutral third-party with the relevant knowledge and experience needed to resolve your dispute. In traditional arbitration, there are several steps involved in picking an arbitrator, resulting in what can be a long process in many cases. However, Complete Online Dispute Resolution (“C-ODR”) can significantly improve your ability to get a high-quality arbitrator in a very efficient manner.

Arbitrator’s Qualifications

Parties looking to use arbitration should work with ADR providers who only use highly skilled and knowledgeable professionals. Ideally, their list of arbitrators should include former Judges, Magistrates, Administrative Hearing Officers and law school professors and others with in-depth expertise. These individuals should have experience in the relevant area of law, industry or type of claim.

Traditional Arbitrator Selection Process

Once you are working with an ADR provider, the provider will have its own method of assigning an arbitrator to your case. Typically, the organization provides a list of qualified arbitrators to the parties who then make a list of which ones are not acceptable and rank the ones who are acceptable. If the parties can’t agree on a qualified arbitrator, they may be forced to file a lawsuit so that a judge can choose the arbitrator.

When the parties can select their arbitrator with the “list” method, there is a risk that an arbitrator will “split the baby” when deciding cases to cull favor with the parties so they will be selected again on future matters. Although most arbitrators are fair and impartial, the “list” method does introduce a potential for biased decision-making.

Advantages of a Software Solution

Using software to select an arbitrator can provide the same quality assurances as the traditional arbitrator selection process without the downside. For instance, ARS’ proprietary algorithm selects the arbitrator based on their level of expertise for a specific matter. Before being added to the ARS panel of arbitrators, each potential Arbitrator is interviewed, and his/her qualifications are verified. Once placed on the panel, an arbitrator will only be assigned cases where his/her background shows a high level of expertise. The computer randomly assigns cases to arbitrators based on their strongest areas of knowledge. Since the software makes the selection based on the type of experience the parties need, there is no risk of bias. In addition, before a matter is assigned to an arbitrator, ARS also conducts a conflict check to make sure that the arbitrator has no connection to the parties to ensure their neutrality.

The selection of a fair and knowledgeable arbitrator is critical., but the process should not impose additional and unnecessary burdens on the parties. An online ADR provider that incorporates highly skilled arbitrators, sophisticated matching technology and conflicts checks offers a fast, cost-effective solution to choosing an arbitrator.

ARS provides the only complete end-to-end online ADR process. To learn more, visit ARS’ FAQ page or contact us for a consultation.




What Types of Parties Can Benefit Most from Online ADR

While all parties can benefit from using ADR, online ADR offers additional advantages to certain types of businesses and individuals. These are the ones who are likely to incur extra time, money and inconvenience when using traditional ADR or litigation. Some common examples of this include the following:

  • Businesses with a dispersed workforce.This includes multi-office companies and those with off-site/field workers, such as those involved in trucking, manufacturing, retail, utilities, rental companies and many others. It can be very time-consuming and expensive to litigate or arbitrate a dispute where the witnesses may be in different locations or different time zones. Online ADR doesn’t require travel, so it is much more cost-effective for these businesses.
  • Companies engaged in ecommerce.Businesses and consumers can be located anywhere which again raises a concern about travel costs. In addition, companies often must find counsel licensed in multiple states if they litigate or use traditional” show up in person” arbitration. Online ADR eliminates this concern. No travel is involved and typically, any attorney can handle the matter regardless of where they practice law. And, let’s face facts: it just doesn’t make sense for a Web-based business to engage in brick and mortar dispute resolution.
  • Banks/credit card companies and consumers.Businesses and individuals spend millions of dollars a year on attorney fees and litigation costs due to bank and credit card disputes. Customer service hotlines and support emails can only go so far, and when that fails, both parties feel as if their only remaining option is litigation. Online ADR provides an effective route to resolving bank and credit card disputes in a timely manner.
  • Insurance companies and policy holders. Online ADR is a timely and cost-effective way to settle claims and/or disputes between insurance companies and policyholders. Disagreements between these parties often occur because of miscommunications in policy coverage or procedure; and, in many cases, the negligence of one of the parties or their insured rides on the coattails of accidents. This is a stressful situation for all parties and the amount of time and money required for litigation is often more hassle and expense than it’s worth. As explained in a paper[I] by ARS Chairman George Friedman, online ADR is an option that takes care of both these concerns.
  • Municipalities and their contractors, vendors and citizens.Conflicts with governmental agencies and/or municipalities can be complicated and exhausting. No matter the cause of the dispute, the nature of government means that litigation is especially difficult and going to court could mean not reaching a resolution for months. That’s thousands of dollars in court and attorney fees and hours of valuable time wasted. In addition, municipalities do not want to be viewed as antagonizing local residents. The best option for all parties is to reach a resolution as quickly as possible and online ADR does that.
  • Small businesses.Courts require that companies be represented by counsel. However, with online ADR, a small business owner can represent him/herself and save the costs of a lawyer. In addition, the whole process is much simpler and easier than other forms of dispute resolution.

Online ADR can benefit almost any party but is especially useful for those who are looking for a fast, affordable and convenient way to resolve a dispute. ARS provides the only Complete Online ADR (C-ODR) solution. For more examples of who can benefit from online ADR, read about ARS’ programs for individuals and businesses or contact us for a consultation.

 

[i]Technology, Alternative Dispute Resolution, and the Insurance Industry: the Future Has Arrived (Really this Time)published in the inaugural issue of the Journal of American Law




What Types of Disputes Can Benefit Most from Online ADR

All disputes can benefit from using ADR, however, online ADR offers additional advantages. While it can be used for virtually any type or size of dispute, its affordability and ease of use makes it especially practical for smaller business and consumer claims. Often these disputes are not pursued because the litigation costs outweigh the amount of recovery. This results in significant amounts of lost money for the parties, with little remedy. Online ADR solves this problem.

Business to Business Disputes

Outstanding claims and receivables can have a profound effect on the financial health of a business. Expedient and cost-effective conflict resolution is critically important to businesses of any size, but the biggest benefit of online ADR is with smaller business disputes. Online ADR can help parties involved in any type of contract dispute, including:

Business to Individual Disputes

Online ADR is a great option for many disputes involving transactions between individuals and businesses, such as credit by a bank or store, property rentals, car leases, work involving independent contractors (e.g., electricians, plumbers, and repair specialists), and problems with wills, estates and trusts. These matters often involve claims that are under $50,000 and would be very expensive to pursue via litigation.

Businesses spend hundreds of millions of dollars in attorney’s fees, in addition to other litigation costs, to pursue or defend against claims they have, or which are brought against them. Individuals are also faced with either pursuing claims they have against a business or otherwise have to respond or defend themselves for lawsuits filed against them. Many individuals with smaller claims can’t afford attorneys to represent them, let alone find the time to appear at court proceedings. Online ADR provides a better option for both the business and consumer.

Vehicle and Property Damage Disputes

Every day there are countless numbers of accidents that result in damage to vehicles and/or real or personal property. These claims involve both business to business and business to individual disputes as injured plaintiffs, policy holders, insurance companies, car-rental and truck and fleet leasing companies pursue actions against each other. Litigation is not a good solution to many of these claims. Online ADR provides a way to resolve such claims in a correct, fair and unbiased manner without resorting to litigation.

Complete Online ADR: The Better Way

Online ADR is useful for any type of dispute, large or small, but it is most cost-effective for smaller claims. In these situations, the parties get the most benefit from online ADR because it gives them the opportunity to resolve their dispute fairly, efficiently and affordably. ARS provides the only Complete Online ADR (C-ODR) solution. For more examples of the types of disputes that benefit from online ADR, read about ARS’ programs for individuals and businesses or contact us for a consultation.




Benefits of Online ADR for Arbitrators

One of the benefits of both traditional and online ADR is that the parties can control much of the process, including selecting an arbitrator and shaping the arbitrator’s powers and authority. However, the arbitrators also have a great deal of control thanks to the relative informality of ADR compared to a courtroom setting. Many skilled attorneys and retired judges choose to become arbitrators because of these benefits. Still, traditional ADR can be a difficult and time-consuming option for them. Online ADR negates many of these issues and provides additional advantages.

Advantages of Online ADR for Arbitrators

Working in an online environment offers arbitrators many of the same benefits enjoyed by the attorneys and parties. It also helps them be more effective in their role.

  1. Reduced time.Traditional arbitration’s limitations on discovery and evidence speeds ADR as compared to litigation. However, online ADR also enables hearings to be much more efficient. Easier scheduling and no travel or wait times means arbitrators can move cases along more quickly.
  2. 24/7 access to matters.Arbitrators can easily review evidence submitted online anytime and anywhere. They can also monitor the status of all of their arbitrations/mediations through an online platform. This helps them manage cases more effectively.
  3. An online platform can provide more security than many email systems, allowing the arbitrator to ensure that matters remain confidential and private.
  4. Expanded caseload.The reduced time, lack of travel and added convenience of online ADR allows arbitrators to handle more disputes in a wider geographic area.

Online ADR Reflects Today’s World

Some critics of online ADR express concerns about eliminating in-person hearings. The reality is that much of our communication today (both personal and business) is by phone, email and video. Even in a traditional ADR environment, telephone conferences are common, and arbitrators are accustomed to hearing witness testimony this way. In fact, some courts have recognized that there is often little reason to insist on in-person hearings, which are more difficult to coordinate, time-consuming and costly.

Online ADR opens more opportunities to arbitrators. They can handle matters that previously they might have rejected. This benefits the parties and attorneys because the more arbitrators are willing to conduct online ADR, the broader the selection of arbitrators available to decide cases.

Conducting arbitration entirely online is an efficient and economical way of resolving disputes. ARS provides the only complete end-to-end online ADR process. To learn more, visit ARS’ FAQpage or contact usfor a consultation.




Benefits of Online ADR for Attorneys

Online ADR for attorneys is a unique opportunity to handle cases that otherwise would not be practical or cost-effective to take on in a traditional, “brick and mortar” way. Litigation and traditional ADR can be time-consuming and expensive. This in turn limits an attorney’s ability to accept new cases. This is particularly true when the claim involves a small dollar figure (under $50,000). Online ADR eliminates many of these disadvantages, allowing firms to represent these clients, which is good for lawyers and clients.

Advantages of Online ADR for Attorneys

From a law firm’s perspective, online ADR changes the economics of smaller cases.

  1. Reduced time and cost.Representing clients with smaller claims is often difficult financially in litigation or traditional ADR. Clients don’t want to pay an hourly fee because the cost could be too high. On the other hand, the operating cost structure of a typical firm makes it cost-prohibitive for a firm to handle the work on a contingency fee. Too many resources must be utilized for a small return. However, with online ADR, those concerns are lessened.

Online ADR only takes a fraction of the time to resolve disputes that is needed for litigation or traditional ADR. Simplified rules of evidence and discovery, set time limitations, online hearings and restrictions on appeals means less time spent to resolve a dispute. This translates into reduced legal fees so clients are more likely to decide to pursue these claims. Law firms don’t not need to devote as many resources and the work becomes more cost-effective.

  1. Convenience and efficiency. Online ADR makes it easier to manage cases in many ways. Software which runs the online platform guides participants through the process with timely reminders of all events and tasks needing attention. Attorneys can instantly monitor the status of all of their arbitrations/mediations with a quick glance. They can upload evidence from virtually any desktop or mobile device to a cloud-based service to preserve e-mails, voicemails, photographs, witness statements, reports, video and audio recordings, etc.

In addition, the ability to conduct hearings online means it is easier to arrange testimony of necessary witnesses, including eliminating some of the legal challenges to obtaining non-party witness testimony for an out of town hearing.

  1. Increased caseload.Once taking on smaller claims becomes more economical, firms can expand the number and types of cases they handle. In addition, online ADR opens up the possibility for a firm to expand their practice nationally. In many jurisdictions, an online appearance does not constitute an appearance in any given state. That means that an attorney can represent a client in an online ADR matter anywhere in the country, regardless of whether the lawyer is licensed in a particular state. As online ADR expands, state bars may start regulating online appearances, so attorneys should check with the rules of their state.

 

As previously discussed, online ADR also provides many advantages in terms of flexibility, control, simplified rules and arbitrator expertise, which all benefit attorneys.

A Better Way

Online ADR provides additional benefits. By offering law firms a way to feasibly represent more clients with valid claims, online ADR serves an important societal interest in helping parties seek justice and resolve disputes out of court.

To learn more about the benefits of online ADR for attorneys, contactARS.

 




How to Reduce Time and Money Spent On ADR

While ADR has many advantages over litigation, traditional ADR can still be a relatively expensive and inefficient option. Rising costs related to party, counsel, witness and arbitrator travel fees, can limit the benefits of ADR, particularly in small cases. As a result, many claims are not pursued because of the time and money involved. Fortunately, online ADR addresses these issues, providing a practical, cost-effective alternative to litigation and traditional “brick and mortar” arbitration.

Online vs Traditional ADR

Traditional ADR is a much less onerous process than litigation, but it developed in a time where parties had few options regarding how to conduct the process. Documents were shared via surface mail or later email; hearings had to be conducted in-person; attorneys were required to manage the claim and deadlines; and scheduling was cumbersome. Online ADR provides a simplified and fully accessible method to handle these items. For example, with both traditional and online ADR, the parties can select an experienced arbitrator. However, it can be easier to quickly find an available arbitrator because of the convenience of working in an online-only environment.

Benefits of Online ADR

Online ADR has all of the advantages of traditional ADR, but the right online ADR provider can also offer these benefits:

  1. Ease of use. Online ADR allows anyone to participate in arbitration without formal training or legal representation. Software which runs the online platform guides participants through the process with timely reminders of all events and tasks needing attention. Parties can instantly monitor the status of all of their arbitrations/mediations with a quick glance.
  2. Accessibility anytime, anyplace. Parties can upload evidence from virtually any desktop or mobile device to a cloud-based service to preserve e-mails, voicemails, photographs, witness statements, reports, video and audio recordings, etc.
  3. Reduced time and money. Parties can save as much as 80 percent of the costs of traditional litigation in as little as 20 percent of the time. This affordability means that claims that were previously unaffordable or not cost-effective can be pursued.
  4. Conducting an arbitration or mediation on an online platform means that hearings are scheduled for the convenience of the participants. There is no need for travel; no waiting around in airports and spending time in hotels; and it’s much easier to find a time when everyone is available.
  5. Security. Companies, law firms and individuals have all been subject to hackers in recent years. Using a secure cloud-based platform that meets or exceeds industry standard SSL encryption ensures that nobody can observe any details or evidence without being authorized.

Online ADR provides the parties with an incredibly cost-effective and flexible method for resolving their dispute. ARS provides the only complete end-to-end online ADR process. Contact ARS to learn more about the benefits of online ADR.

 




New Jersey Court Rules No Blanket Right to In-Person Arbitration Hearing

Among the many reasons arbitration is used by parties is the ability to eliminate some of the formalities of litigation, while maintaining certain rights for the parties to state their case. However, a recent New Jersey appellate court decision addressed how far the law allows parties to go regarding how arbitration hearings are conducted.

State Farm Guaranty Insurance Co. v. Hereford Insurance Co., No. A-3749-16T3 (N.J. App. Div. Mar. 14, 2018), involved an intercompany insurance subrogation arbitration conducted by Arbitration Forums, Inc. (“AF”). At issue on appeal was whether Hereford was entitled to an in-person arbitration hearing, rather than a telephonic one. The New Jersey Appellate Division found that neither the parties’ arbitration agreement, the applicable arbitration rules, nor the State’s Arbitration Act, N.J.S.A. §§ 2A:23B-1 et seq. require that a hearing be conducted in person, as long as it is “appropriate for a fair and expeditious disposition of the proceeding” (the court did not address the Federal Arbitration Act). As provided in the New Jersey arbitration statute, an arbitrator has discretion in deciding whether a hearing is necessary and setting the time and place of hearing. Nothing in the applicable law or rules states a hearing must be in a physical location. Accordingly, the Court held that absent a contract or a specialized showing, telephone hearings are permissible and further, other electronic means, such as conducting hearings by videoconference, would be acceptable, provided the parties were given a fair opportunity to be heard.

In light of the decision, there are a few key points parties should keep in mind when drafting or invoking arbitration provisions in New Jersey:

  • Be specific in the contract. If you want to have an in-person hearing, clearly specify that in the arbitration clause.
  • Make challenges promptly. In the Hereford case, the Court asked the parties for suggestions for an arbitration provider. Hereford never provided a suggestion, but then sought to object to the arbitrator’s rules after the Court went with State Farm’s selection and ordered arbitration.
  • Consider the benefits of telephone or video hearings. Many individuals and businesses are used to communicating by phone and video. Arbitrators are also accustomed to hearing witness testimony this way. There is little reason to insist on an in-person arbitration hearing which would be more difficult to coordinate, time-consuming and costly.

Conducting arbitration entirely online is an efficient and economical way of resolving disputes. To learn more about the many advantages of online arbitration, visit ARS’ FAQ page or contact us for a consultation.




8 Reasons to Choose ADR over Litigation to Resolve Your Dispute

Alternative Dispute Resolution (ADR), including arbitration and mediation is not new. It has been used successfully for hundreds, if not thousands, of years. However, in recent years, it has been growing in use with more companies choosing to use arbitration in commercial and consumer disputes. With this increased usage, the methods for conducting ADR have expanded making it an even more practical and cost-effective solution for many types of disputes.

ADR vs Litigation

Simply stated, litigation is a formal, generally public process which resolves disputes through a court with a judge or jury. It is subject to strict rules imposed by law governing the conduct of the proceeding, such as the formal rules of evidence. Arbitration is private process whereby parties work with a neutral third party to hear both sides and make a final and binding decision, using agreed-upon rules governing how the process will work. Mediation is a negotiation facilitated by a neutral third party. The mediator does not impose a decision, but helps the parties come to an amicable resolution. Mediation is useful to help the parties can find common ground, while arbitration is used as an alternative to litigation when the parties cannot resolve their dispute and need a third-party to impose a decision.

Benefits of Arbitration

For many types of disputes, arbitration offers a better alternative to litigation. Its advantages include:

  1. Flexibility and control. Parties can set terms in their arbitration contract governing how the process will work. This includes establishing rules regarding discovery, hearings, time limitations and other matters. In addition, parties can schedule hearings and deadlines to accommodate their needs.
  2. Speed. According to statistics of the American Arbitration Association, on average, U.S. District Court cases took 12-16 months longer to get to trial than cases using arbitration.
  3. Low cost. Less time spent to resolve a dispute means lower costs for attorneys’ fees. In addition, discovery is much more limited in arbitration, and appeals are very limited, so those costs are all saved.
  4. Simplified rules of evidence and discovery. Typically, there are limits on the nature and scope of discovery and time limits on how long the process can take. Issues are handled through phone calls rather than multiple hearings, subpoenas, depositions, interrogatories and the like. And, the strict rules of evidence don’t apply.
  5. Privacy and confidentiality. Arbitrations are private with only designated parties in attendance and the proceedings are strictly confidential. In contrast, litigation is open to be public.
  6. Arbitrator selection. Parties can choose an arbitrator with subject matter expertise as opposed to being assigned a judge randomly. This is particularly important in complex cases requiring specialized knowledge.
  7. Finality. Appeal rights are very limited in arbitration, so disputes are finally resolved more quickly.

For more information on the benefits of arbitration in commercial disputes, the American Bar Association published an excellent analysis in this article.

Arbitration provides many advantages over litigation, but online arbitration has additional benefits allowing parties to further reduce costs and increase efficiency. Contact ARS to discuss how online arbitration can help your business.