…Fees the parties pay to the courts cover part of the cost of litigation, but the remainder is funded by various levels of government, which ultimately comes from the taxpayer.
…It makes sense for government to fund the criminal justice system, since society as a whole benefits when criminals are punished. But how does society benefit when one company sues its supplier because of a contract dispute?…
…Other than for cases involving the indigent, civil rights, and other matters of general societal importance, it does not make sense for taxpayers to fund the resolution of private disputes in publicly funded courts — especially contract disputes between competent adults with some power of negotiation...
…These types of cases should be decided by arbitration rather than litigation…
Who arbitrates the cases on eQuibbly?
Arbitrations are conducted and decided by former court Judges with years of experience presiding over civil cases in American courts of law. The Judges have retired from their official duties and are now conducting private arbitrations for eQuibbly. You can view their experience and qualifications on the Judges page.
How do we know your Judges are neutral and unbiased?
Our arbitrators are former court judges – they are professionals who were trusted by the government to make decisions about cases in court. We do not, and would not ever, allow arbitration decisions to be made based on keeping any corporate account happy. It goes against every moral fiber of our being and everything we hold dear. It simply would not be tolerated. Arbitrators take an oath to make unbiased decisions and we hold them to that oath. In any event, pursuant to the New York Convention, the Federal Arbitration Act, and other similar arbitration Acts, anyone who can prove that the there has been partiality or prejudice can have the Award overturned by a court.
What “law” is applied in determining disputes?
The parties to a dispute can have a custom arbitration and agree beforehand what jurisdiction’s laws they would like to apply. The default according to eQuibbly’s arbitration Rules is to apply American legal principles (U.S. and Canadian) and what is fair and just given the circumstances and the facts surrounding the dispute. Examples of American legal principles include: the right for private parties to enter into private contracts; a contract consists of voluntary promises between competent parties to do, or not to do, something, which the law will enforce; equality before the law, et cetera. The majority of small claims cases deal with landlord/tenant disputes, collection of debt, and breach of contract. The laws in most jurisdictions with respect to most matters that come before our Judges are not so different that they will not be able decide cases based on American legal principles. Where necessary, our Judges will research the matter at issue to arrive at a just decision.
How do the parties submit evidence and how do the arbitrators know it’s real?
Parties submit evidence by uploading it to a secure, password-protected location on eQuibbly, which can be accessed by the Judge and both parties. Authentication of the evidence works the same way as it would in court. An arbitrator can subpoena witnesses and require that a document be notarized or sworn if necessary. By law, an arbitrator can administer oaths, subpoena witnesses and documents, and impose penalties for being untruthful, just as a court would.
Does the opposing party have a chance to contest the evidence presented?
Both parties and the Judge have secured access to all the evidence online pertaining to the dispute. The parties are given ample opportunity to view all the evidence and contest it in the ‘hearing’ before an Award is made. The ‘hearing’ online is not the same as court where the parties have to make all arguments in a single 3 or 4 hour sitting. It may take place over several days, or even weeks if necessary, with questions and answers going back and forth as and when the parties and the Judge have time to respond. Text conversation can be instant, or not. However, there is no pre-hearing discovery of documents, since it is an expedited process as opposed to court where discovery could go on for months and costs can skyrocket.
Are inarticulate people disadvantaged?
Most of the arbitration takes place in synchronous and asynchronous text chat online. So the parties can take their time and choose their words carefully. Or the parties can have their statements translated for them if necessary prior to submitting them. The parties’ opening statements are submitted online before a Judge gets involved so they have a lot of time to make sure they are conveying properly what they intend to communicate. If the Judge deems it necessary for a fair arbitration, a live video conference can be held.
Can the arbitrator’s decision be appealed?
Arbitral institutions have a choice of whether to allow appeals of their Awards (the arbitrator’s decision) – it is addressed in their Arbitration Rules. According to eQuibbly’s Rules of arbitration, Awards cannot be appealed. This is done to avoid the situation found in court litigation where parties continue appealing decisions as a strategy to win, hoping the other party will run out of resources and drop the lawsuit or concede. Many people appreciate the finality of arbitration for this very reason. It is no different in small claims courts in some jurisdictions where decisions cannot be appealed.
What if the arbitrator does not follow eQuibbly’s arbitration rules?
The first complaint should be to eQuibbly’s administrator to determine if something has gone wrong and if it can be corrected. If not, the jurisdiction in which the arbitration occurs, or is deemed to occur, has laws governing the arbitration process. If a party believes something unlawful or egregious has occurred, they can petition the court in that jurisdiction to take appropriate action to correct the situation.
Is it possible to contest an arbitrator’s decision?
Various arbitration laws (similar laws enacted in different jurisdictions) provide very limited grounds to contest an Award, for example, fraud, corruption, or prejudice. Courts typically will not entertain arguments beyond those few limited grounds. That is another of arbitration’s benefits – it will not drag on for months and possibly years through multiple appeals.
How do we know this will be a fair, rational and honest means of resolving disputes?
eQuibbly’s arbitration Rules, which must be followed according to the pre-arbitration agreement signed by the parties, are displayed on the website. People can determine for themselves whether they are rational and fair (the parties can also agree beforehand to have a custom arbitration and alter some of the rules). If the Rules agreed to are not followed, or if something egregious has occurred, the parties can petition the court to correct the situation or over-turn the arbitration Award (also see answers to relevant questions above). It is probably less involved than what a party would have to do in court if a sitting court Judge did not follow the law or regulations.
How can we enforce an arbitration award if someone does not comply with it?
Enforcement of the Award is not necessary in the vast majority of arbitrations since we take precautions to dissuade the losing party from refusing to carry out the Award. On eQuibbly, the parties sign a pre-arbitration agreement where they agree that the neglectful party will cover all costs of enforcement, including attorney’s fees, if the party fails to comply with the Award.
As with a court judgment after litigation, if enforcement becomes necessary, enforcement procedures will need to be followed – typically by filing particular forms with the court – for example, to garnish wages. The law in most jurisdictions gives the defendant time to pay the judgment after litigation – often 30 days – and in many jurisdictions, gives time for the losing party to appeal the decision before any enforcement actions can be taken. So even after someone receives a judgment after litigation, they will still have to wait and take further action to enforce the judgment if the defendant does not pay.
With arbitration, if enforcement becomes necessary, the Award would first need to be ‘confirmed’ by a court (converted to a judgment of the court) and then enforcement actions could be taken. The procedure is somewhat different in different jurisdictions, but it is typically a summary procedure similar to a motion or petition. It is not litigation – it is usually much quicker, easier, and much less costly than litigation and usually does not involve any appearance before a Judge. Many jurisdictions allow a request for confirmation of an arbitration Award to be submitted to the court in writing, without the need for a hearing before a Judge, unless it is contested. Once the Award is confirmed the enforcement procedure is the same as it would be to enforce a judgment of the court.
*This is not legal advice and should not be construed as such. You should seek competent legal counsel for any legal advice.
Here is an example of the rules you will have to sift through to find out what you need to do, and how to do it, when you want to resolve a dispute in small claims court. This example is Florida’s Small Claims Rules, however most states’ rules are quite similar. Not as easy to understand as the government claims.
You are vulnerable without an arbitration clause in your contracts and it could prove to be devastating. Contracts are relatively useless if you cannot enforce them without too much hassle; enforcing them through litigation may be too costly and time-consuming to be practical.
An “arbitration clause” is simply a provision in a contract that requires the parties to resolve disputes through private arbitration rather than litigating them in court. These clauses have become very popular of late since we live in a litigious society where often a breach of contract leads to one of the parties filing a lawsuit. Most people do not realize how costly and time-consuming it typically is to use the courts to enforce contracts.
Large companies like Verizon and AT&T that have lots of experience with litigation are painfully aware of the costs. That is why many now have arbitration clauses in their legal agreements. Look at the agreement you signed with your cellular provider or your internet service provider and you are likely to find an arbitration clause. You also might find one in your employment contract.
Suing someone in court seems like the obvious thing to do to force someone to fulfill their contract obligations. But if they have a lot more money to spend on high-priced attorneys and delay tactics, they are going to have you tied-up in hearings and motions and pre-trial discovery for so many months or possibly years that you will go broke before you ever get the chance to present your case.
Arbitration is usually a lot less expensive and a lot quicker than going to court – especially when you use an online arbitration service like eQuibbly.com. An arbitrator has more flexibility to move the process forward and thwart any attempts by one party to drain the other party of their resources. You can read about some of the other benefits in the article, “The Benefits of Arbitration”.
Where no arbitration clause exists, contracting parties can still agree to arbitrate a dispute after the fact. Even after litigation has commenced, a judge will usually agree to place a lawsuit on hold to allow the parties to resolve it by way of arbitration. But, these situations call for both parties to agree to arbitration at a time when it is less likely they will agree to anything. Where an arbitration clause exists in a contract, one party can compel the other party to arbitrate, and where the party refuses to participate, an arbitrator can make a binding and enforceable decision in their absence.
To avoid the costs and inconvenience of litigation, be prepared and insert the following clause into all of your contracts:
“Any controversy or claim arising out of or relating to this contract, or the breach thereof, shall be settled by final and binding arbitration administered by eQuibbly online under its Arbitration Rules, and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof for enforcement purposes. “
You might ask: Why is eQuibbly offering an online arbitration service conducted by former trial judges?
Given all the challenges of starting and running a business, I have been asking myself this very same question – WHY?
There are several reasons. Perhaps the most important of which is that the government-run justice system is failing the vast majority of individuals and small businesses. “Access to justice” is not available to most people. How many people have you heard shout from the rooftops, “I have just spent the past year litigating a dispute in court and it was fantastic! It was so worth it! I can’t wait to do it again!”? I’m guessing not many. For most of us, it is simply not practical. Litigation is time-consuming, frustrating, complicated, psychologically draining and expensive.
As a result perhaps as much as 75% of the population, and likely a greater proportion of businesses, have more to lose suing someone in court to resolve a dispute than they have to gain. eQuibbly offers an alternative to litigation, or walking away – one that is convenient, simple to understand, conducted by highly qualified arbitrators, and one where the judgment is legally binding and enforceable in a court of law.
Our raison d’être, besides making a profit, it to provide as many people as possible with a practical way to gain access to justice; not only those with bank accounts large enough to hire attorneys to represent them in court. To us, the concept of access to justice in the civil arena, means everyone having the opportunity to present their side of an issue or dispute to an independent, unbiased, qualified, third-party who will weigh the evidence, help uncover the truth, and arrive at a fair, equitable resolution. It also means having concise and easy to understand rules and procedures so people have a solid grasp of how their hearing by the arbitrator or adjudicator will proceed. They should not be so complicated that representation by an attorney is necessary to make heads or tails of them. The average person should be able to represent themselves without fear of losing because of a technicality they missed as a result of not having studied the law for years in advance.
When we refer to “access to justice”, it is in the context of civil law, not criminal law; eQuibbly, as with other arbitral institutions, cannot resolve criminal matters. It is this access to civil justice that motivates us to provide a simpler, more convenient, equitable and less costly way for individuals and businesses to resolve their disputes – while still ensuring the decision of the arbitrator is enforceable in a court of law, much like a court judgment resulting from a trial.
eQuibbly’s online arbitration service is a huge step closer to achieving this seemingly elusive concept of access to justice. Not everyone can afford what we believe are very reasonable flat fees for our judges to arbitrate their disputes, and not everyone has access to a computer with a high-speed internet connection. However, there are millions of people who can benefit from our service for whom court is not an option.
Would you try online arbitration rather than suing someone in court? Please post your answers in the comments section below.
First I will give a short explanation of what “arbitration” is and then I will explain why an “arbitration award” has greater legal force than a signed settlement agreement, which might result from a mediation, or any other contract.
“Arbitration” is a legally binding way of resolving disputes outside the court system – it is an alternative to litigation and one form of “alternative dispute resolution” (ADR). Arbitration is used regularly by large companies. Small companies and individuals are not as familiar with it yet in North America; Europeans are more familiar with it because of the government mandate for businesses selling online to provide online dispute resolution.
In arbitration, parties to a dispute refer their case to a mutually acceptable, neutral, third-party arbitrator, such as a Judge on eQuibbly, who reviews the evidence presented by the parties and hands down a decision that is legally binding and enforceable in a court of law. The arbitrator’s decision is in the form of a written document called an “arbitration award”, or simply an “award”. Private entities are permitted by various laws in the US, Canada, UK, Australia, South Africa and many other countries to arbitrate disputes and hand down awards which stipulate what the arbitrator’s decision is on the matter at issue and what the resolution will be.
It is this unique aspect of an award of being “enforceable in a court of law” that sets it apart from a settlement agreement or any other signed contract. The courts and the legislators in many countries realize the importance of being able to resolve disputes in private and in a less formal and less costly way than a public trial. They also realize the importance of being able to enforce the resulting award using the power of the courts – as one would have to do with any court judgment resulting from a trial – should the losing party fail to carry out the resolution imposed by the arbitrator. And, of course, the importance of being able to do this without necessitating a ‘re-litigation’ of the matter, since that would defeat the purpose of opting for arbitration over litigation in the first place.
To authorize this, legislators in many countries have passed similar arbitration Acts (laws) that attach special force to a valid award. These laws are slightly different depending on what province or state or country has jurisdiction. However, most arbitration laws essentially declare that if an award was given by one or more arbitrators whose decision was not procured by corruption or fraud, where there is no evidence of a material bias or an undisclosed material conflict of interest, and the award meets certain technical requirements, such as naming the arbitrator and stating the place of arbitration, the courts will consider the award valid, final (cannot be appealed), and binding, and they will confirm it and convert it into a court judgment without anything further needed. This can be done on a simple summary motion to the court; no litigation or trial necessary. At that point it is just like any other court judgment handed down by a judge. Since there are codified arbitration laws and the courts are generally very much in favor of allowing arbitration, and often encourage it, it is almost impossible to over-turn or appeal a valid award.
This cannot be done with a settlement agreement or other signed contract. One cannot bring a summary motion in court to convert an agreement or contract into a court judgment. To obtain a judgment that would allow one of the parties to the contract to use the power of the court to enforce it, the issue would have to be litigated in front of a judge in the same manner as any other lawsuit. The purpose of arbitration is to bypass litigation, which is typically very costly, complicated, time-coming and inconvenient…not to mention a huge pain in the butt.
One of the other legal benefits of arbitration is that most countries either have a clause in their Arbitration Act stating that where there is a valid award originating in one legal “jurisdiction” (a state, or province, or country) being presented to a court for enforcement purposes in another jurisdiction, the court will accept it as if it were made in its own jurisdiction. Or the country (148 countries at last count, including the U.S., Canada, the U.K., Australia and South Africa) will likely be a signatory to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”) which states that foreign arbitration awards can be confirmed and enforced in any other country that is a signatory to the New York Convention. This is something quite extraordinary since it is much more difficult, and sometimes impossible, to do this with a foreign court judgment. This is one reason large companies, often multi-national in nature, typically prefer arbitration over litigation.
If you have any questions regarding arbitration or arbitration awards, please comment below and we will do our best to answer them. Please note that we cannot provide any legal advice and any information provided is intended for information purposes only and is not, and should not be construed as, legal advice.