Arbitration is defined as a process where a dispute or claim is submitted to an arbitrator who shall decide on and dispose of the dispute. The arbitrator may be a person, a group of person, or an organization chosen by the parties to the dispute. Once the arbitrator has made his ruling, the parties are bound to abide by it, without prejudice to filing an appeal. This method is a faster and cheaper alternative to a court proceeding.
The process of arbitration begins with selection of the arbitrator. The parties may suggest third parties, whether an individual person, a group of person, or an organization. Then the parties negotiate as to who is the best and most qualified person to decide the case. If the arbitrator is composed of a group of persons, it is customary that each party nominates one arbitrator of their choice. In a car accident dispute, the relevant factors to consider in choosing the arbitrator may include the arbitrator's: experience and expertise in car accident claims, reputation, availability, interest in the outcome of the case, whether he is fair or biased, and the service fees. The state usually provides a list of accredited arbitrators from whom the parties can choose. But the parties are not prohibited from selecting an arbitrator outside of the list.
Once an arbitrator is appointed, he will set a date for the submission of relevant documents. This substitutes for the lengthy hearings in court proceedings. At this stage, each party can submit relevant papers to prove their arguments, which may include the contract, police reports, medical bills, and other certifications. Witnesses may be presented to give testimonies or they may put their testimonies in writing and submit it for consideration. Parties are required to furnish each other a copy of the documents they submit in order for them to file any objection. No other documents may be accepted or witnesses may be presented after the deadline except if the arbitrator deems it necessary that additional papers and testimonies be given for the proper disposition of the dispute. Parties are encouraged to cooperate with each other to expedite the process. In some cases, the parties are required to sit down in one room and present their arguments. This gives the parties to converse and discuss the material points of the case.
Finally, the arbitrator decides the case. The arbitrator's decision will be based primarily and entirely on the papers and materials submitted in the arbitration. Only testimonies of witnesses presented at the hearing may be considered. The decision will state the parties, a summary of the facts and issues involved, as well as the awards of damages and costs. The decision may be stated in the presence of the parties or sent through mail. The parties may request the arbitrators for a copy of the decision and the basis and reason for such ruling. In case a party is not satisfied with the decision, he/she may file an appeal with the court. However, courts limit the basis for review of arbitral awards. An appeal may be entertained if there is a patent injustice or disregard of the basic rules of due process.