Arbitration Law
Millions of disputes are resolved through arbitration every year. Whether you're facing a mandatory arbitration clause or choosing it voluntarily, know how the process works — and how to protect your rights.
Learn How Arbitration Works →Understanding your legal situation is the first step to protecting your rights and getting fair compensation.
Arbitration resembles a private trial conducted outside the court system. The parties select a neutral arbitrator (or panel of three) — usually a retired judge or attorney with subject-matter expertise — from a roster maintained by an arbitration provider like AAA, JAMS, or FINRA. The arbitrator manages a streamlined discovery process, conducts an evidentiary hearing where witnesses testify and documents are submitted, and then issues a written "award." The entire process is private and confidential. The Federal Arbitration Act (FAA) governs most commercial arbitration in the United States and strongly favors enforceability.
Binding arbitration produces a final, enforceable award with extremely limited grounds for appeal: fraud, arbitrator corruption, exceeded authority, or fundamental procedural unfairness. Courts almost never overturn arbitration awards on the merits — this finality is both its strength and its risk. Non-binding arbitration (used in some court-annexed programs) issues an advisory award either party can reject. Some arbitration providers now offer optional appellate arbitration panels for an additional layer of review. Parties should understand they are largely giving up their right to appeal before agreeing to binding arbitration.
Arbitration clauses are embedded in credit card agreements, employment contracts, consumer products warranties, brokerage agreements, nursing home admission forms, and countless other contracts. These clauses typically: (1) require arbitration instead of court, (2) waive the right to a jury trial, (3) include class action waivers preventing group claims, and (4) designate a specific arbitration provider and rules. Courts enforce these clauses broadly under the FAA, though consumer arbitration rules (AAA Consumer Rules, JAMS Consumer Minimum Standards) provide baseline protections like cost-capping and venue convenience.
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