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What Is Mandatory Arbitration?

A mandatory arbitration is a process which aims to settle disputes through the intervention of an arbitrator. The arbitrator, in most cases, is a lawyer who serves as a neutral party.

Both parties involved in the dispute are normally required to meet with the arbitrator as a way of resolving whatever dispute they have out of court. The main objective here is to avoid any court trial as much as possible. For people who cannot afford to pay legal fees, this procedure is very ideal. Although in some cases, arbitration companies may require consumers to pay fees in filing their complaints.

Arbitrators are usually selected. They are responsible for gathering evidence and deciding on the amount of arbitration award. Once an award is decided upon and it is accepted by the aggrieved party, the dispute is settled.

However, if one of the parties involved will not accept the award, a lawsuit can be filed in court. When this occurs, the responsibility of deciding on who is liable now lies with the judge or jury.

It is important to note here that the courts normally do not overturn the decision of the arbitrators regarding the awards. A trial will only be allowed if one of the parties involved is able to prove any commission of a fraud during the arbitration process.

With mandatory arbitration, those involved in a dispute will have to deal with the arbitrator. The reason is that cases covered under this ruling will not be accepted by the court even if one of the parties try to take the dispute to a judicial body.

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