Arbitrators are typically lawyers, business professionals, or retired judges with expertise in a particular field. Acting as impartial third parties, they listen to and decide disputes between opposing parties. Arbitrators can work alone or on a panel with other arbitrators. An arbitration is very similar to a court proceeding. The arbitrator presides over the trial just as a judge does in court.
They are the sole judge of the facts and decide the outcome of the case. The rules of evidence can be relaxed in arbitration, allowing additional information to be presented to the arbitrator. After both litigators have presented evidence and arguments on behalf of their clients, the arbitrator will issue a decision resolving the dispute. Before arbitration, the employer and employee (together known as the “parties”) select an arbitrator to hear their dispute. Once chosen, they will work with the arbitrator to set a date for their case to be heard.
As arbitration is becoming an increasingly attractive alternative to lengthy and costly court proceedings, arbitrators are in high demand and their roles are increasingly important. An arbitrator may discuss a case with another member of the arbitration panel who knows that case, whether all members of the panel are present or not. The ethical obligations of an arbitrator begin as soon as they become aware of their possible selection by the parties and continue even after the decision has been made in the case. The National Arbitration Committee recommends that arbitrators address ethical issues that may arise in their cases as soon as possible and seek advice if necessary. If an agreement cannot be reached and the parties proceed to a formal (binding) arbitration procedure, the arbitrator acts as a judge by reviewing and interpreting all evidence presented (including witness statements, testimony, documentation, etc.), applying relevant laws and rules, and then making a final decision or “award” that is final and binding. This award can only be appealed under certain unique circumstances. By initiating the arbitration process, the parties have agreed to accept the arbitrator's decision as final.
The Federal Arbitration Act (FAA) is the law that allows an employer and worker to agree to arbitration instead of litigation. Disclosure must be made to all parties, and the arbitrator must accept such work only when they believe it can be carried out without a real or apparent conflict of interest. Generally, an arbitrator will only be considered impartial if they have or have had a relationship with one of the parties, such as being a member of the employee's family or being a customer or provider of the employer. Unless otherwise agreed upon or required by applicable rules or law, the arbitrator must maintain confidentiality regarding all matters related to arbitration procedures and decisions. In addition to reimbursement for agreed fees and expenses, an arbitrator must not accept any gifts or items of value from a party, insurer or lawyer for a pending arbitration. They may encourage parties to mediate their dispute but should not suggest that they act as mediator. When there is more than one arbitrator, they must give each other full opportunity to participate in all aspects of the arbitration procedure.
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