Removing a Case from Arbitration

Arbitration is a private dispute-resolution process that is often faster and more private that litigating matters. Many parties specify in contracts that any disputes will be subject to arbitration, and parties may agree in other situations to arbitrate their claims.  Even after an arbitration proceeding has been filed, there are some instances when matters are removed from arbitration so the parties can litigate their claims through the ordinary judicial process.  Generally, removing a case from arbitration occurs in several different situations.

Failure to Follow Rules

Removing a case from arbitration is oftentimes a consequence of parties who fail to participate in the arbitration process or follow arbitration rules.  For instance, parties are oftentimes required to pay deposits at the beginning of the arbitration process in order to move into the next phase of the proceeding.  A party may not have the financial resources to pay such a deposit, which is often far in excess of filing fees that they may need to pay in court.  If payment is not made, the case may be removed from arbitration because the rules about payment are not being followed.

Under certain circumstances, removing a case from arbitration may be a consequences of conflicts of interest or other ethical breaches between an arbitrator and a party.  In addition, a matter may be removed from arbitration for failure to abide by rules governing the exchange of documents or other matters related to the arbitration.  In order to avoid delays in the arbitration process, it is important that parties follow all rules related to an arbitration and satisfy all of the deadlines relate to the arbitration proceeding.

Consent of the Parties

If the parties consent to it, removing a case from arbitration is possible even after an arbitration has been filed.  There are many reasons why parties may consent to remove a matter from arbitration.  This can include costs associated with an arbitration, since arbitrations may cost more in filing fees and arbitrator expenses than the ordinary judicial process.  In addition, removing a case from arbitration and litigating matters instead may save time and effort when a party tries to collect on a judgment after a decision has been rendered on a matter.  Moreover, parties may wish to consent to the removal of a case from arbitration because there are additional methods of uncovering information during the normal litigation process and there are additional options for an appeal through the ordinary judicial system.  So long as all parties agree to remove a case from arbitration, this is usually possible so long as all arbitration fees are paid up to that point and other prerequisites are satisfied.

Claims not Subject to Arbitration

Removing a case from arbitration can also happen if the claims at issue in the proceeding did not belong in arbitration to begin with.  When parties draft arbitration provisions, they usually discuss the nature of claims that can be resolved through arbitration rather than litigation.  Claims that are not in the category of claims that properly belong in arbitration pursuant to an arbitration provision may be removed from arbitration so that parties are able to litigate their claims instead.

In other instances, claims cannot legally be resolved through arbitration, and any proceeding based on such claims may be removed from arbitration.  For instance, some claims based on statutes that are not covered in arbitration provisions may not be able to be arbitrated.  In addition, there are certain instances when public policy would not support the arbitration of claims even if the parties agreed to arbitrate any disputes and an arbitration action has been filed.  An experienced arbitration lawyer should know if the types of claims arbitrated between parties properly belong in litigation and the arbitration should be discontinued so the parties can litigate their claims.

Kinds of Relief

Arbitrators can usually only provide certain kinds of relief to parties, and removing a case from arbitration may be a solution so that parties have the possibility of pursuing the relief sought through the ordinary litigation process.  The ability of arbitrators to grant certain kinds of relief varies from jurisdiction to jurisdiction, but arbitrators may have difficulty resolving matters related to numerous areas of the law.  For instance, arbitrators may not be able to fully resolve all matters related to divorce, child custody, visitation and other matters, even if the parties agree to arbitration or signed a prenuptial agreement specifying that matters will be arbitrated.  Moreover, arbitrators cannot grant the same type of relief as bankruptcy courts, and even though a creditor and debtor may have an arbitration agreement, and a debtor may need to request relief from a bankruptcy court exclusively in many instances.  Of course, arbitrators cannot usually decide matters related to immigration law, wills and estates, and other subject matters, and removing a case from arbitration may be a consequence if a petitioner files an arbitration based on those areas of the law.  An experienced arbitration lawyer should have a sense if the arbitration proceeding involves a subject area that does not belong in arbitration.

The Rothman Law Firm has substantial experience working on arbitration matters.  If you are looking for an experienced New York and New Jersey attorney to handle your arbitration or other legal issue, please feel free to contact The Rothman Law Firm to request a free legal consultation.