Arbitration

Arbitration

                                                                                            

Binding and Non-Binding

Arbitration can take two essential forms. In one, the arbitrator makes a decision which is not binding on the parties. In another, the Arbitrator is given the power to make a deciaion thart will become a Court Order and will be legally binding on the parties. The remaider of this discussion will relate to the latter i.e. binding arbitration.

Arbitrator Has Power To Decide

In binding arbitration, the parties give the arbitrator the power to “impose” a solution—i.e. the parties agree to be bound by his or her decision. Thus, arbitration has more “teeth” than mediation. In arbitration, the parties select the person who will resolve their disputes. They have the opportunity to select someone with a background and expertise in the areas of their disagreement. The process itself may be conducted in a manner more similar to litigation. A hearing will be held, evidence may be presented, testimony may be given and advocates for the respective positions of the parties may be argued. The standard rules of evidence may be applied (all of this is subject to negotiation and agreement before the process begins).

 

Advantages: Privacy, Speed and Time

The process of litigating through the Court system is slower than many can tolerate. The time between beginning and end in arbitration is more the subject of your own control. You and your spouse, or your chosen agents or representatives, can pick your own arbitrator (It can be anyone you agree upon). You can ask about the arbitrator’s availability and schedule in advance of making the selection. Remember, although arbitration may bring the matters in dispute to resolution more quickly, the actual divorce must still be granted by a Court—an arbitrator cannot do so-- and the standard Maryland rules pertaining to grounds for divorce will apply.

Privacy

In an arbitrated proceeding, the transcript of the testimony is not automatically made public. The files in an arbitrated proceeding can be protected from public disclosure and can effectively be “sealed” i.e. closed to the prying or inquiring eyes of public view. In litigated proceedings, Courts are not free to do. In addition, arbitrated cases take place in a private office or other controlled setting. Ingress and egress can be restricted by mutual agreement. Thus, they can be made far less exposed to public view.

Choice of “The Law” and “The Rules"

The parties to a dispute can agree to apply any substantive law to the resolution of their dispute; the arbitrator is obligated to apply Maryland divorce law unless the parties agree otherwise. For example, the parties may wish to divide their assets equally, regardless of whether or not the property was acquired before, during or after the parties lived together as Husband

and Wife. the only issue the parties may wish to submit to an arbitrator may be the valuation of the property in question—and who should receive which property. A Maryland Court cannot transfer title to property and cannot, therefore, “swap” properties. An arbitrator, if the parties have agreed, can do so. Once again, a degree of creativity and flexibility is available in arbitration if parties are so inclined. Absent such an agreement, of course, the arbitrator would be bound by the same constraints as would a Maryland trial court judge. The procedures used to require mutual disclosure of financial and other information can be made as flexible as desired.“…. litigants may waive their rights under the Act and submit to arbitration proceedings that do not meet all of the requirements of the Maryland Court Rules. For example, the parties may agree that each will sign a written authorization or authorizations which will enable the other party to obtain tax returns or other forms of financial information directly. This is quick, direct and less expensive than the more coercive and time consuming avenues available under the more formal discovery procedures contemplated by the Maryland Rules of Civil Procedure. 

Cost

Time is money. Anything that can be done to expedite the timing of the procedures will save expense. I do not mean to imply that cost is the only, or even the major, reason to consider arbitration. However, it is clearly a factor. The arbitrator is a private individual serving in the capacity of a Judge. The arbitrator will bill by the hour, or in some identifiable fashion, for the services which are performed. However, anyone who has sat through a litigated case knows how much time is devoted to waiting, to postponements, to unexpected delays and to the demands otherwise placed on a Court’s time. Combine that experience with the clumsy procedures available to force disclosure of information when disclosure is resisted, is done unwillingly or is done deceitfully, and you will soon understand that the cost of the arbitrator is money well spent to save these additional expenditures. 

How is Arbitration Different From a Trial?

Arbitration may very well resemble a trial, although the parties are free to negotiate their own “rules”. The principal distinction between an arbitration proceeding and a trial is that a trial is conducted by a Judge. An arbitration is conducted by an arbitrator. Trials typically occur in a Courthouse. Arbitrations typically occur outside of a Courthouse and in a private setting. 

When is Arbitration Useful?

Arbitration is always useful. However, when issues involving custody and/or visitation are involved, arbitration may have limited utility. See you lawyer for advice on that topic. Arbitration is much more helpful when financial matters are at stake.

If the Arbitrator's Decision Cannot be Appealed, Why Use an Arbitrator?

To bring an end to the dispute as expeditiously and inexpensively as possible. A well selected arbitrator, particularly as it relates to the financial issues in a divorce, may be as well qualified, or better qualified, than many Judges. An arbitrator may be a former Judges with experience in family law matters, or a practicing attorney who likewise has experience in family law matters.

How do you Select an Arbitrator?

If you have retained an attorney, ask your attorney. Call the County or State Bar Association. Look on the Internet. Then consider the type of problems you intend to present. Does the arbitrator have a background in family law matters? Ask for a resume. Then check with an attorney who does a significant amount of family law work. Who would they recommend? If you are unsuccessful in mediation, ask for a recommendation from the mediator---then test the recommendation in the same way.

 

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