Pros And Cons Of Arbitration Agreements

Posted on April 11, 2021

Con: A legal action normally takes nine to twelve months to go from the first submission to the hearing. However, unlike an arbitration procedure, a court action opens the possibility of making legal decisions to the court ahead of the trial, which has the effect of reducing the issues or dismissing all or part of the claims. Con: The court is required to apply the contractual terms between the parties in accordance with the simple terms of the contract. Thus, the typical provisions of construction contracts, such as pay-if-paid clauses, the absence of compensation clauses, non-liquidation clauses and clauses requiring a written termination in a timely manner, should normally be applied in accordance with their terms. Con: Unlike a court decision that generally allows the party to apply the judgment within 30 days, an arbitral award can only be carried out when an appeal is lodged and a court formally upholds the sentence and a court decision is rendered in accordance with the sentence. This process usually takes at least 90 days. An important development over the past decade has been the growing acceptance of binding arbitration, particularly with the recent Supreme Court Decision Epic Systems Corp. v. Lewis, 137 pp. Ct. 809 (2017).

Judicial facilitation of the resolution of private disputes through arbitration has been legal in both state and federal courts since the passage of the Federal Arbitration Act in 1926. The recent increase in the popularity of arbitration has led to the inclusion of arbitration provisions in pre-litigation contracts, as well as the presentation of the postal incident to arbitration. Although historically rooted in the field of labour relations, the use of arbitration has rapidly expanded to the point that arbitration is still at least a consideration for the parties and/or opponents of the trial. The American Arbitration Association (AAA) reported that the total number of arbitration applications increased by 26% between 2014 and 2015. Since the 1980s, the trend of annual increases in enrolments has been repeated. The increase in arbitration applications shows that the parties and their lawyers find that arbitration is a viable and often preferred alternative to civil trials. Epic Systems is undoubtedly a welcome relief for any employer who has been the subject of a class or group action. But should every employer automatically consider an arbitration procedure to be the right approach, simply because they can be exempted from the right of workers to assert class and grouping rights? Not necessarily. Pro: Since the rules of evidence do not apply in an arbitration procedure, it is less time-consuming and inexpensive to present a case in an arbitration proceeding than in a court proceeding. As we were blogging recently, the United States


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