05
Aug
11

Arbitration

I was sworn in today by Chief District Judge Brady as an arbitrator.

North Carolina has court-ordered arbitration for most types of cases filed in District Court.  The exceptions include: evictions, many family law matters, special proceedings, wills and estates, and those where the sole claim is an action on account.  Parties can also agree to have arbitration in District Court actions (and in Superior Court actions where no more than $15,000 is in dispute).  Then there is binding arbitration, which may use other rules, but is still subject to the ethical restrictions of NC law for arbitration.

Arbitration is often called an “informal” process, but that sells it a bit short.  All sides present their case to the arbitrator in a hearing that lasts one hour.  The arbitrator will usually render his or her decision at the conclusion of the hearing.  This decision is binding and carries the same weight as any other judicial decision, unless it is appealed.  The rules of evidence are a guide, but the arbitration rules say that the arbitrator “shall consider all evidence presented and give it the weight and effect the arbitrator deems appropriate (emphasis added).”

Arbitration has significantly reduced the number of cases that are tried before a District Court judge and/or jury.  Many parties are satisfied that, even if the arbitrator did not rule in their favor, they have had their say.  Either party may appeal within 30 days and have a “trial de novo” (trial with a clean slate in which the arbitration ruling and testimony is inadmissible).  At the conclusion of the arbitration, the parties pay their equal share of the arbitrator’s fee of $100.00.

Sometimes arbitrators are accused of “splitting the baby”–a gruesome phrase, but it’s the one used.  Actually, the rules require the arbitrator to “resolve all issues raised by the pleadings” and award “any amount supported by the evidence.”  The arbitrator can even award more than what was demanded in damages, but is not allowed to award any “equitable relief.”  In short, the arbitrator should not try to play mediator or negotiator–the ruling should be based on the facts and the law, and not, for instance, arbitrarily split in two to encourage settlement or dissuade an appeal.

If the matter is appealed, an interesting system allows for the appealing party to recover their costs.  The first party that files a demand for a trial pays $100.00 to the Clerk of Court, who will hold it until after trial.  If the appealing party does better at trial than at arbitration, then the amount is returned to the appealing party.

I am looking forward to this new addition to the services that Morgan Law, PLLC provides.  In addition, I plan to become a certified Superior Court mediator by the end of January–and that’s a whole other blog for the future.

 

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