Since the establishment of the American Arbitration Association in 1926, arbitration has steadily grown more popular. Businesses and employers favor arbitration over litigation because of its potential to save costs and remain confidential. Arbitration in Florida is following this trend, especially for businesses and employers. You’d be hard-pressed to find a commercial or employment contract that doesn’t have an arbitration provision.
Here are 12 things to know about arbitration in Florida.
“With court dockets backed up for years, arbitration is usually a better way to get final resolution on legal disputes.”
Michael Long, Business Disputes Attorney
1. What Is Arbitration?
Arbitration is a type of dispute resolution process that occurs outside the courtroom. The “arbitrator” assumes the role of the judge in the arbitration proceedings. Sometimes, multiple arbitrators—called an arbitration panel—act as judges.
Like a standard lawsuit, the parties:
- File documents,
- Gather evidence,
- Present evidence,
- Argue the case, and
- Interview witnesses.
At the end of the arbitration proceeding, the arbitrator, or the arbitration panel, makes a final decision in the case. The parties may be able to appeal the decision, depending on whether the arbitration is binding or nonbinding (we’ll cover that in detail later).
2. Arbitration Isn’t the Same As Mediation
Both mediation and arbitration are ways of resolving a dispute outside of court in front of a neutral third party. That’s about where the similarities end, though.
Parties typically decide the whole case in arbitration, but in mediation, they may decide some, all, or none of the issues. In mediation, the mediator hears both sides of the case and guides the parties toward resolution of the case. On the other hand, arbitrators make a final decision about the case, including awarding a party a money award. Arbitrators can’t have private conversations with parties unless all parties are listening in or receive a copy. Mediators, on the other hand, routinely have separate conversations with the parties. In a few words, arbitration is much more “court-like” in nature.
3. Is Arbitration Legally Binding? It Depends
Arbitration can be binding or non-binding; it depends on how you end up in arbitration. For example, if you’re in arbitration because you agreed to arbitrate in a contract, the contract language decides.
Need help understanding an arbitration clause’s meaning? Talk to our experienced Florida arbitration attorneys. We represent employers and businesses in arbitration in Florida and can help you interpret your contract.
Binding Arbitration
In binding arbitration, the parties typically agree to waive their right to file a lawsuit or appeal the arbitrator’s decision. In Florida employment contracts, for example, you’ll likely find an arbitration clause. These clauses commonly require the parties to attend arbitration in Florida and agree to be bound by the arbitrator’s decision.
Non-Binding Arbitration
Parties participating in non-binding arbitration have leeway to turn around and appeal the arbitrator’s decision. For example, a party may file a lawsuit or ask a trial court to review the arbitrator’s decision.
4. Participation in Arbitration May Be Voluntary or Involuntary
Arbitration is voluntary if the parties agree to have an arbitrator or panel decide the case. Involuntary arbitration occurs when a judge orders the parties to participate in arbitration. Voluntary arbitration typically happens for one of two reasons:
- The parties agreed to arbitration in a contract or
- The parties decide to go to arbitration after a dispute arises.
Both involuntary and voluntary arbitration can either be binding or non-binding.
5. Your Attorney Can and Should Represent You During Arbitration
Just like in court, parties can hire a lawyer to represent them during arbitration in Florida. An experienced Florida arbitration lawyer understands how the process works and advocates for your best interests.
6. Arbitration Is Usually Confidential
The constitution requires that litigation takes place in a public forum. Arbitration proceedings, however, are usually confidential proceedings without a public record. If parties decide that they would like a record to be made of the proceedings, they might be able to request so in writing.
7. Arbitration Usually Costs Less and Takes Less Time Than Litigation
This is the reason people arbitrate—it’s usually faster and cheaper compared to litigation through the courts.
The parties pay for the arbitration proceedings. The amount that the parties pay and how they divide the cost depends on the circumstances. For example, the arbitration provision in the contract may say who pays how much and when.
The Florida Supreme Court determines how much compensation court-appointed arbitrators may receive per day to render services in involuntary, non-binding arbitration.
But in the end, arbitration usually takes less time than litigation, in part because there is a limit on the amount of discovery (evidence, witnesses, etc.) that parties can request.
8. If There’s a Florida Arbitration Clause in Your Contract, Chances Are That It’s Enforceable
If your contract has an arbitration clause, it’s likely enforceable. Courts use the same principles to determine whether an arbitration clause is enforceable that they use to decide if a contract is enforceable. Most contracts are enforceable if there was a meeting of the minds in making the contract and everyone knowingly signed.
But contracts are unenforceable, for example, if they’re the product of fraud or duress. Likewise, if the subject of the contract is illegal, then some or all of the contract might be invalid. Lastly, if not everyone who was supposed to sign the contract signed the contract, then you may be able to challenge the arbitration clause’s enforceability.
9. Businesses May Benefit from Including a Florida Arbitration Clause in Their Contracts
Because of the cost-efficient and frequently confidential nature of arbitration proceedings, it’s an attractive option for businesses. When disputes happen, you want them to achieve a resolution with minimal interruption to your business. The last thing you want to do is spend unnecessary time and money defending against or bringing a lawsuit.
Because of this, arbitration clauses may be your business’s friend. Where appropriate, they may streamline the dispute resolution process. More than that, though, they might keep your internal business affairs out of the public eye. Having any kind of public dispute poses a level of risk to your brand and reputation. With arbitration, you contain the dispute and help make sure that you protect your business’s legal rights and overall image.
Another benefit is that you may be able to pick an arbitrator with experience related to what your business does. For example, if you own a lawn care company, then you probably wouldn’t prefer an arbitrator whose law practice focuses on the food industry.
10. Florida Arbitrators Don’t Always Need to Meet Training Requirements to Oversee Arbitration Proceedings
The Florida Supreme Court doesn’t “certify” arbitrators. But the Florida Supreme Court or the chief judge of a Florida county court may remove an arbitrator from the list of court-appointed or approved arbitrators.
Court-appointed arbitrators must meet the following requirements to serve as an arbitrator in Florida:
- Licensed to practice law in Florida and
- Participated in at least four hours of professional training.
Chief arbitrators need to have held a Florida law license for at least five years.
Exceptions to these rules apply. For example, the parties can agree in writing for a non-attorney arbitrator to oversee the arbitration proceedings. Otherwise, a non-attorney can act only as an arbitrator if they’re on an arbitration panel.
11. Arbitrators Have Judicial Immunity Meaning They Usually Can’t Be Sued
Arbitrators are immune from civil liability in the same way that judges are immune. This means that you usually can’t sue arbitrators as long as they were acting within the scope of their role as an arbitrator during the proceedings. In some cases, though, you may be able to appeal the arbitrator’s decision because they were biased. Arbitrators are liable for their criminal acts or other extremely improper actions.
12. You Might Be Able to Pick An Arbitrator Who Has Experience in a Particular Subject or Area of Law
The parties may be able to choose the arbitrator to preside over the proceedings. You can go online and check what qualifications and experience they have. This is of benefit to businesses, especially because you can find an arbitrator who is familiar with your industry. Potentially, this saves you both time and money. Rather than spending valuable time educating the arbitrator on your industry, you can instead focus on the issues at hand.
BrewerLong—Florida Attorneys You Can Trust
At BrewerLong, we exist to advocate for and guide our clients through even the most complex business disputes. For over 14 years, we’ve provided competent, personable legal counsel to our business clients. We pride ourselves on being approachable yet sophisticated. Clients appreciate that we’re personable and focus our practice on business. Call us today or contact us online.
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