Arbitration: Alive, Well, and Worth Consideration

by: Keyur Shah & Kally Goodwin-Ratzloff

Arbitration has become an infrequently used tool that many providers are unwilling to employ out of fear—fear of the unknown, fear of navigating the process, and ultimately fear of knowing the appropriate time to arbitrate. However, with the appropriate fine tuning, arbitration can be a means to resolve claims quickly, without the associated costs of traditional litigation.

The courts, like providers and individuals, appreciate judicial efficiency. Arbitration is an alternate form of dispute resolution where a third party determines a final decision on the resolution of a case. On average, typical litigation spans 33 months, whereas preparation for arbitration, and completing the process averages 19 months. In total, the process is more efficient, cheaper for the parties, and produces a fair outcome. In fact, studies have shown that 93% of individuals who completed arbitration expressed satisfaction with their arbitration and believed it was handled without bias.

Successful arbitration starts at the drafting stage. The arbitration agreement should apply to all potential claims between the parties, have an opt-out period, mutuality of obligation and include a severability clause. If your arbitration agreement is considered one-sided, confusing, or limits the amount of recoverable damages, it can be considered unconscionable. Drafting a clear and concise agreement is imperative.

At the execution stage, the agreement should be a stand-alone document and not buried in another contract. The signor should be given time to digest the agreement, and the opportunity to consult with an attorney. The signor should also be informed that the agreement is voluntary and not a condition of admission.

With a well thought out development and implementation plan, it is possible to employ arbitration agreements as a cost-saving measure that will benefit all involved parties. The Kitch firm has experts on hand to draft arbitration agreements and to educate administrators and admissions personnel on arbitration agreement best practices.

Arbitration: Alive, Well, and Worth Consideration

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