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A plain-English guide to how private, binding dispute resolution works, written for someone hearing the word for the first time.
The basics
Arbitration is a way to resolve a dispute without going to court. Both sides agree to put their disagreement in front of a neutral arbitrator, an independent decision maker, whose decision they accept as final.
Here is the basic shape. One side, called the claimant, files a claim explaining what happened and what they believe they are owed. The other side, called the respondent, is formally notified and gets a fair chance to answer. Both sides submit their documents and evidence. The arbitrator then reviews the complete record and issues a written decision. That decision is called an award.
The award is binding. That is the key difference from an argument, a complaint line, or a collections letter. Both sides agreed in advance, usually in a contract, to accept the arbitrator's decision instead of taking the matter to court. That agreement is what gives arbitration its force, and federal law stands behind it.
Arbitration is also private. There is no public courtroom and no public case file. The parties, the arbitrator, and the record: that is the whole room.
Compare
Three honest ways to resolve a dispute. They differ in who decides, how long it takes, and whether the outcome binds anyone.
Arbitration has existed for a century, but it was priced for large commercial disputes. That pricing is why small claims almost never get there.
Traditional forum figures reflect typical published filing and administrative fee ranges before arbitrator compensation. Our single case pricing is on the pricing page.
The legal basis
Arbitration is not a handshake arrangement. A federal statute, the Federal Arbitration Act, has backed it since 1925. Two of its sections do most of the work.
9 U.S.C. § 2
Section 2 makes a written agreement to arbitrate valid and enforceable, on the same footing as any other contract. If both sides agreed in writing to arbitrate a dispute, a court will hold them to that agreement.
9 U.S.C. § 9
Section 9 lets a party take the arbitrator's award to a court and ask the court to confirm it. Once confirmed, the award has the force of a court judgment and can be enforced like one. Courts review awards only on narrow grounds, so the arbitrator's decision is, in nearly every case, the final word.
This page is general information about how arbitration works. It is not legal advice.
Where it fits
Arbitration is not for every dispute. It fits best when three things line up.
An unpaid invoice, a parking charge, an overdue fee. Each one is too small to justify a lawsuit, so most go unresolved. Arbitration gives them a forum that fits their size.
Arbitration rests on consent. The agreement can live in a signed contract, in posted terms, or in community rules such as an association's CC&Rs.
Contracts, invoices, photos, and notices tell most of these stories. When the record is on paper, a case can be decided on the record, without anyone traveling to a hearing.
Vocabulary
The arbitrator's final written decision. It states who prevails and what, if anything, is owed.
The party who files the case and states what they believe they are owed.
The party the claim is filed against. They are formally notified and may respond, settle, or counterclaim.
The official, chronological record of the case. Every filing, notice, and exhibit is entered on it.
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