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Arbitrator: Definition, Role & Qualifications

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  • 0:00 Why Is an Arbitrator…
  • 0:25 Definition & Role of…
  • 1:27 An Arbitrator's Duties
  • 2:35 An Example of Arbitration
  • 3:41 Arbitrator Qualifications
  • 4:44 Lesson Summary
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Lesson Transcript
Instructor: Shawn Grimsley
Arbitrators fulfill a crucial role in alternative dispute resolution and specifically in arbitrations. In this lesson, you will learn what an arbitrator is, what an arbitrator does and some of the qualifications necessary to be an arbitrator. After the lesson, you will be given an opportunity to reinforce your knowledge with a short quiz.

Why Is an Arbitrator Important?

Arbitration is a popular form of alternative dispute resolution that is used by many individuals and businesses to resolve disagreements in place of pursuing a lawsuit. Knowing the role an arbitrator plays will help you understand the process and be more effective if you participate in arbitrations.

Definition and Role of an Arbitrator

An arbitrator reviews testimony and evidence presented by the disputed parties at a hearing and resolves the dispute by issuing a decision that may include an award of money. You can think of an arbitrator as a private judge hired by the disputing parties to resolve their dispute. If the arbitration is binding, the parties cannot seek a reversal of the decision in court except under very limited circumstances. However, the successful party can seek help from a court in enforcing the arbitrator's decision.

An arbitrator serves as the decision-maker and 'referee' in an arbitration proceeding, much like a judge during court litigation. The arbitrator is bound by the rules outlined in the parties' arbitration agreement. If he is a member of a special arbitration organization, such as the American Arbitration Association, he will be bound by the rules of that organization as well, including a set of ethical rules.

An Arbitrator's Duties

An arbitrator has several duties. Among them are:

  • Interpreting and applying the rules and laws applicable to the arbitration
    • The applicable rules should be outlined in the arbitration agreement. The parties may also designate a particular state's law to govern the dispute in the arbitration agreement.
  • Managing the scope of discovery that can be undertaken by both parties
    • Discovery is a formal process of investigation to determine facts relevant to the dispute. The investigation can include taking witness statements and reviewing documents required to be disclosed by the other disputing party.
  • Conducting the arbitration hearing in which both sides of the dispute may submit testimony, other evidence such as documents, and arguments
    • Each side's position may be summarized in a written document, often called a statement of the case, and be submitted to the arbitrator to review as part of the hearing process.
  • Making a decision resolving the dispute based on the testimony, evidence and arguments submitted by both sides of the dispute
    • A decision may include granting an award of money.

An Example of Arbitration

Let's say you hired a general contractor to renovate your kitchen. You signed a contract, which included the expected cost of the renovation and the time for completion. The project is completed three weeks late, was over-budget by about 11% and you believe the work was shoddy. Upon review of the contract, you see you agreed to mandatory binding arbitration, using an arbitrator from the Better Business Bureau.

At the hearing, you meet with an arbitrator at his office. You present the arbitrator a statement of your case, which includes the facts you believe are relevant and your argument. The arbitrator conducts a hearing where he permits you to make an opening statement about your side of the dispute. The general contractor then presents his opening statement. You and the general contractor present evidence, such as the contract, pictures of the finished kitchen and testimony from subcontractors. You make a final argument, and the hearing concludes. Sometime later, the arbitrator issues a written statement that describes the relevant facts, the law applied and the decision.

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