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Definition - What does Arbitration mean?

Arbitration is one of several types of alternative dispute resolution strategies which allow parties in a legal dispute to have an independent third party hear the issues of the case. Arbitration is used to avoid litigation or a protracted legal dispute in court. Unlike other forms of alternative dispute resolutions like negotiation or mediation, arbitration is generally binding.

The benefits of arbitration, like other dispute resolution strategies, are it allows each party to potentially receive a fair resolution to their dispute without the expense and delay of a court battle. Additionally, each party is able to negotiate without the legal constraints of a court hearing. Ideally, all parties will agree to the final resolution to their case.

Arbitration is governed by federal and state laws, and some states have passed statutes which outline how arbitration can be used in civil cases including the procedures for confirmation of an arbitrator's award and the process to give an award the force and effect of a judgment after a trial in a court.

Arbitration and Personal Injury

Arbitration can be used in a personal injury case to help the plaintiff and the defendant come to a mutually satisfying decision. In personal injury arbitration a third party arbiter will review the injury claim and make a legally binding decision.

The main benefits of personal injury arbitration are its low cost. It also offers a quick resolution, and it is relaxed and less formal. Arbitration also allows both parties to come to an agreement which is not too high or too low but allows the injured party to receive some type of settlement. It eliminates the unpredictability of a jury decision where injured parties, who deserve compensation, may walk away with nothing and other claimants, who deserve very little, get a ridiculously high award.

Finally, arbitration provides greater predictability because the person deciding the case is a lawyer with a solid understanding of what personal injury claims are worth. It also allows victims to receive justice without the hassle of going to court.

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