Arbitration is a factor in multiple contract types. For instance, an arbitration clause can be found in a consumer agreement such as a car lease. While consumers can negotiate some terms, most provisions are non-negotiable. Commercial entities often negotiate every term in an agreement, including whether arbitration is required. There are benefits to each decision, and the sections below list a few things for clients to consider when deciding whether to have an arbitration clause in a real estate contract.
Time
Generally, arbitration is completed sooner than litigation. One reason is that it is easier to schedule a meeting with an arbitrator than it is to go before a judge. Even if the real estate attorney in Chicago handles arbitration full time, their caseload is smaller than a judge’s. An arbitrator can set appropriate deadlines and schedules, and most parties can get in front of an arbitrator within days when issues arise.
Money
Many variables can affect the cost of dispute resolution, such as the discovery amount, subject matter, case duration, and involvement of witnesses. Arbitration requires an hourly fee, and the arbitrator bills for every document reviewed and hearing conducted. Some arbitrations can have more than two arbitrators, which can drive expenses higher. By comparison, judges do not charge for time spent on a case. While arbitration can be cheaper than litigation, some savings can be lost to arbitrator’s fees.
Convenience
In arbitration, a final hearing is usually held in person. However, prior hearings and conferences are often done over the phone. This makes it easier for parties and a real estate attorney in Chicago, and it can reduce expenses. Final hearings are often held in law firm conference rooms such as those at Starr Bejgiert Zink & Rowells & where amenities may be more comfortable than those found in courthouses.
Rules
In court, judges apply civil procedural rules, evidentiary rules, and other relevant laws. Parties can disagree with the judge’s implementation of the rules, and they may be able to appeal to other courts. During arbitration, these rules are more relaxed but some still apply. When using an arbitrator, parties are typically forced to accept the ruling made.
