Before You Sue — Read This A Look at the American Arbitration Association

Filing a lawsuit as any co-op or condo resident that’s been involved in one can attest, is not only very time-consuming and expensive, but equally unnnerving and contentious. A much saner solution to settle any acrimonious dispute is to consider settling the matter without setting foot into the courtroom. That is where organizations like the American Arbitration Association can help.

A quick perusal of the definitions of the word "arbitration" in the context of United States law explains the term as "a form of alternative dispute resolution, a legal alternative to litigation whereby the parties to a dispute agree to submit their respective positions (through agreement or hearing) to a neutral third party (the arbitrator(s) or arbiter(s)) for resolution. In practice, arbitration is generally used as a substitute for judicial systems, particularly when the judicial processes are viewed as too slow, expensive or biased. “

Putting that definition into practice is the raison d'etre of the AAA. The not-for-profit organization, was founded in 1926, following enactment of the Federal Arbitration Act, a statute that provides for judicial facilitation of private dispute resolution through arbitration, giving parties at odds an alternative to heading straight to court.

Their Mission

In their own words, the AAA "provides services to individuals and organizations who wish to resolve conflicts out of court. The AAA’s role in the dispute resolution process is to administer cases, from filing to closing. The AAA's administrative services include assisting in the appointment of mediators and arbitrators, setting hearings, and providing users with information on dispute resolution options, including settlement through mediation. Ultimately, the AAA aims to move cases through arbitration or mediation in a fair and impartial manner until completion,” according to its mission statement.

The American Arbitration Association defines arbitration in relation to the work they do as a “time-tested, cost-effective alternative to litigation.” In arbitration, the dispute is submitted to one or more impartial persons for a final and binding decision, known as an 'award.' Awards are made in writing and are generally final and binding on the parties in the case. The primary difference between arbitration and a lawsuit is essentially the degree of formality used by the people involved. Arbitration was actually here first: the Egyptians, Greeks, and Romans all resolved conflicts using the arbitration method before instituting a formal court system. Mediation and negotiation, other forms of ADR, are similar to arbitration in terms of process, except that the decisions made in those processes are usually non-binding.


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  • this is a joke - there is nothing fast about arbitration - it is akin to Dilbert cartoon episodes - an arbitrator gets paid to have a meeting about when the parties should have another meeting. It is ridiculous... meanwhile parties are not only paying the arbitrator, they are paying their attorney for such pointless engagements. There is no hurry to move along since they get paid; there is no hurry to make a decision on even the most trivial matters. The fact that is is fast and cheaper is a myth-- perpetuated by whom? the AAA themselves! The AAA's representatives present the same to collect fees. I have removed arbitration clauses from all my contracts. i find it to be exactly what it says "Arbitrary" or something more sinister, biased ...they don't follow even their own rules; a fairly incompetent association that makes no apologies for it. They represent mediocrity in the legal community at best but seek top fees for it. You are better to stick to a panel of your peers "jury" or an elected judge -- who usually has an interest in at least moving a case along (not getting paid to prolong it!). People just don't listen - Supreme Court justice, Sandra Day O'Connor warned the country of the huge issues of arbitration.