Alternative Dispute Resolution (“ADR”)

Alternative dispute resolution (“ADR”). Those three words may sound great to people who have spent a lot of money in court litigation. But not all ADR proceedings are the same. Depending on the nature of the dispute, one particular method of ADR – arbitration  may not be the best method to resolve a claim.

Did you know if your contract contains an arbitration clause which selects arbitration pursuant to the American Arbitration Association rules your filing fee is based on a percentage of what you seek in the demand! For example, for commercial cases between $150,000 to $300,000 in damages, the filing fee is $4,650.00 to $5,350.00. Compare this with a $319 court filing fee in Maricopa County Superior Court. And the arbitration filing fee does not include money that you must pay the arbitrator or your own attorney if you hire one.  You don’t have to pay extra for a judge except for the county taxes you pay in any event.

In addition, did you know that this type of arbitration is not an “Action” under the statute that allows the judge to award the “successful” party attorney’s fees in a contested action arising out of contract when there is no express attorney’s fees provision in that contract? Thus, some arbitration provisions make it cost prohibitive for a party to hire an attorney or even make a demand upon the other side through arbitration when they have a just cause. While I’m not trying to dissuade anyone from ADR because litigation can be expensive, you should always carefully consider whether to include an arbitration clause in a contract and use a carefully drafted one to make sure you are protected in the event that a claim or dispute arises.  In addition, AAA arbitration is not appealable if you receive a bad decision.

At Hymson Goldstein & Pantiliat, PLLC we have many experienced attorneys who can review your contract and advise you on whether an arbitration clause make sense for you.  Remember, at Hymson Goldstein & Pantiliat, PLLC, Our Business is Your Peace of Mind®.

Written by Attorney John Lohr, Jr.,

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