ARBITRATION [“GOTCHA CONTRACTS”] SAVE MONEY AND TIME -- RIGHT?
WELL . . .
1. Sometimes your situation may need you to also join in third parties as part of the fault/blame. As the third party is not a participant in the contract, you cannot bring them in. THIS SITUATION ALONE can be a fatal flaw in your corporate and business needs.
2 Where will you arbitrate? Kentucky? Hawaii? Alaska? If the contract does not say, what are you to do?
3. Who selects the arbitrator? If the other side knows the arbitrator, can they be neutral? How many arbitrators may there be? Remember, you must pay the arbitrator’s fees. The last one my client had to pay for charged $115.00 per hour more than I charge to represent the client. How do you know the arbitrator is being fair in his hourly charges?
4. What discovery can you conduct? Can you ask the usual questions to the other side like you have the right to do in judicial litigation?
5. What if you need subpoenas? If you receive a “subpoena” from an arbitrator, are you obligated to appear? Likely not without a court order. If the parties must file with the court a request for a court-ordered subpoena to appear in an arbitration proceeding, you may as well have just gone to court in the first place.
6. How “loosey goosey” (legal term?) can the arbitrator(s) be with allowance of evidence?
7. When will you have your trial? At least in court proceedings, the judge can dictate when trial will occur. Can your arbitrator(s)?
8. Will there be a recording of the proceeding that you can use for later in case the other side lies? (People do not lie under oath you know.)
The above eight items are just the beginning of concerns you, as a business owner/manager, must consider before you merely agree to arbitration clauses. Please consult your lawyer before you believe that arbitration can possibly be better or cheaper than proceeding in the usual judicial court process.