Business owners receive correspondence, documents, and notices of all kinds. Some require action, while others go straight into the trash. Legal documents fall into the first category. For example, it’s important to pay attention if you have received a notice of arbitration.
But reading the notice is not enough. You have to answer the question, “What’s next?” Answering that question may start with understanding more about arbitration itself.
A Brief Overview of Arbitration
Arbitration is one form of alternative dispute resolution (ADR). The other two common types of ADR are negotiation and mediation. The key word is “alternative.” Arbitration, mediation, and negotiation offer you an alternative to costly, time-consuming civil trials.
While usually less formal than a trial, arbitration is more formal than other types of ADR. The parties will appear before one or more arbitrators to present their cases. Arbitrators often have special knowledge that helps them understand that case. For example, an arbitration involving construction might be heard by someone with extensive experience in the construction industry. Sometimes parties will exchange information (discovery) before the hearing. The arbitrator typically hands down a judgment or award, which may be binding (enforceable) or non-binding.
It may seem like a new concept, but people have used arbitration for thousands of years. In fact, some consider King Solomon an early user of arbitration based on the case where he had to decide a case between two women whom both claimed the same baby. Greek mythology and ancient history also reference instances where parties used the principles of arbitration to resolve a dispute.
In the early 20th century, more countries began to pass laws reinforcing the concept of arbitration. Now, arbitration is commonly used to conclude business legal disagreements. According to the American Arbitration Association, their arbitrators resolved 468,932 cases in 2021.
Some consumer and business contracts may include clauses that require the parties use arbitration to resolve their disagreements. You may have seen this type of language in cell phone service agreements, employment contracts, and business contracts. Parties to a legal dispute may voluntarily agree to arbitrate their issues. Also, courts may order parties to submit to arbitration.
A Notice of Arbitration Means…
If you have received a notice of arbitration, it means that someone has started the arbitration process. It’s similar to filing a lawsuit. In some cases, one or both parties may have already filed lawsuits. Other parties go straight to arbitration rather than filing any lawsuits.
Under Florida law, the party initiating the arbitration must notify the other parties involved. The other party (the respondent) will have a deadline to respond to the notice or demand for arbitration. From that point on, both parties usually have deadlines to meet. Some arbitration cases may involve preliminary hearings.
While it may be less formal than civil litigation, arbitration is still serious. It is imperative that business owners who receive a notice of arbitration act immediately to protect their interests. Arbitrators may hand down default judgments against parties that do not respond or attend the arbitration hearing.
We Encourage You to Call Us Immediately if You Receive a Notice of Arbitration
It’s crucial that you get experienced legal advice as soon as you receive the notice – if not before. For example, your company might be engaged in a legal dispute with another company, a client, or a vendor. Your business lawyer’s skilled negotiation could help you end the disagreement without lawsuits, going to trial, or even engaging in alternative dispute resolution.
Attorney Richard Sierra at the Florida Small Business Center assists clients like you with business and litigation matters. As always, Our Goal Is to Help You Succeed™. For an appointment, you may call us at 1-866-842-5202 or use the contact form on our website. We represent clients throughout the State of Florida, including Coral Springs, Coconut Creek, Boca Raton, Delray Beach, Pompano Beach, Sunrise, Fort Lauderdale, Miami, West Palm Beach, Jupiter, Deerfield Beach, Stuart, Port St. Lucie, Orlando, Naples, Fort Myers, Sarasota, Tampa, and surrounding communities.