What is business arbitration and when is arbitration generally the right option for resolving a contract or business litigation?  Business arbitration in San Diego and throughout the State of California is an option to resolve a dispute or lawsuit without the extensive time and expense of going to trial.  The process of arbitration is usually much more attractive to the parties than a trial not only in terms of time and money, but the parties can be certain that the matter will be resolved once and for all.

Key Takeaways to Answer the Question: What is Business Arbitration:

• Many commercial contracts contain arbitration clauses that require disputes to be resolved outside a traditional courtroom through arbitration.
• Business arbitration is a formal dispute-resolution process in which the parties agree to present their case to a neutral third party—an arbitrator—rather than a judge and jury. It is designed to streamline the resolution of commercial disputes while maintaining structure, legal standards, and enforceable outcomes.
• Arbitration will result in resolution – one way or another – in a relatively short period of time.
• Your attorney will make a significant impact on the outcome of your case.  Experience, and a proven track record in arbitration (and at trial) will be important to ensure the best potential outcome in your case.
• Arbitration is designed to streamline the resolution of commercial disputes while maintaining structure, legal standards, and enforceable outcomes. Arbitration is not informal negotiation. It is a legal proceeding with defined procedures and evidentiary rules.

The Process of a Business Arbitration

When a business dispute arises, many owners may presume the matter will be resolved in court. In reality, many commercial contracts contain arbitration clauses that require disputes to be resolved outside a traditional courtroom. The question then becomes: What is Business Arbitration, and how does the process actually work in practice?

Business arbitration is a formal dispute-resolution process in which the parties agree to present their case to a neutral third party—an arbitrator—rather than a judge and jury. It is designed to streamline the resolution of commercial disputes while maintaining structure, legal standards, and enforceable outcomes. Arbitration is not informal negotiation. It is a legal proceeding with defined procedures and evidentiary rules.

The process typically begins in one of two ways:

• A dispute arises under a contract that already contains an arbitration clause.
• The parties have exhausted other traditional forms of Alternative Dispute Resolution (ADR), including negotiations, a settlement conference, and business mediation.

Once the parties agree to arbitration, the next step is selecting the arbitrator. Each side often proposes experienced, qualified candidates with extensive legal and submect matter knowledge relevant to the dispute. The goal is to appoint a neutral decision-maker who understands the industry, the law, and the complexity of the issues involved.

Once selected, the arbitrator establishes how the process will unfold. This usually includes:

• A schedule for each step in the process
• Procedures for marshaling documents and evidence
• Guidelines for witness testimony
• Briefing deadlines and hearing dates

Unlike traditional litigation, arbitration is generally more flexible. Discovery may be narrower. Motion practice is often limited. The focus of an arbitration is on identifying the core issues and the facts at hand to resolve the dispute efficiently. This does not mean the matter is less serious than a trial. It means the process is structured to reduce delay and procedural maneuvering. It is also designed to resolve the matter at hand.

The Process of Business Arbitration

During the process of business arbitration, each party usually presents a brief and the arbitrator governs the process of evidence collection, witness examination, and legal argument(s). The arbitrator evaluates the facts and applies the governing law or contractual standards. The result is a written decision known as an “award.” That award determines the rights and obligations of the parties.

It is important to understand that the decision of the arbitrator is not always or necessarily a “win” or a “loss.” While it is possible for one party to prevail entirely, arbitrators often craft practical solutions tailored to the circumstances of the dispute. Depending on the issues presented, the award may include:

• Financial damages
• Specific performance of contractual obligations
• Declaratory rulings clarifying rights under an agreement
• Allocation of fees and costs

Binding arbitration carries firm and final legal consequences. The parties agree in advance to accept the arbitrator’s decision as final. The grounds for appeal are extremely limited, generally confined to evidence of fraud, corruption, or serious procedural misconduct.

This finality is one of arbitration’s defining characteristics. It reduces prolonged litigation and the maneuvers of a trial, but also removes the safety net of a broad appellate review. For that reason, preparation and strategy are critical.

Why Experienced Counsel Matters

The question of “What is Business Arbitration?” also requires an explanation of the importance of experienced legal counsel. The arbitrator effectively functions as the judge and fact-finder. There is no jury. Once established, the rules move the process forward quickly. Deadlines are firm. Opportunities to correct mistakes are limited.

An experienced attorney provides value at every stage by:

• Evaluating whether arbitration is required or advantageous
• Assessing the enforceability of arbitration clauses
• Developing a focused evidentiary strategy
• Presenting testimony and documentary evidence effectively
• Because arbitration is much faster than litigation, preparation must be focused and thorough from the outset. There is little room for delay or procedural correction once the hearing begins. Businesses that approach arbitration casually often discover too late that the compressed timeline worked against them.

Arbitration is a very different legal forum from a trial, and carries more substantial issues and consequences in a much more condensed timeframe. It can offer efficiency, privacy, and industry-specific expertise. It will also produce a final, binding decision with minimal opportunity for appeal.
For business owners looking to resolve a substantial business dispute, the key question is not simply “What is Business Arbitration?” The more important question is “How can we make sure to navigate the process deliberately and strategically?” With the structured preparation and experienced guidance of Watkins Firm, business arbitration can provide clarity and resolution without the prolonged uncertainty and risks of a trial.

Pro-Tip: “Arbitration is a cost-effective, timely alternative when you have an agreement in your contract that says, I’m going to resolve this by arbitration. It’s usually quicker and cheaper, but you waive the right to a jury trial and the arbitrator himself can be very expensive. But in the long run, waiting to go to trial for two and a half years and waiting for a judge who has an overburdened docket can be just as risky. So arbitrations are great. They cut to the chase and you really don’t have a lot of time for dramatics. You have to have accurate law and facts when you go in and it’s usually decided by your arbitration brief because the arbitrator knows when he sees a case that has no merit or has great merit.

So it keeps a lot of the extraneous legal stuff out of the way and focuses the matter to a head.  And generally it keeps crazy verdicts from happening because if you win, you’re going to get something reasonable. And if you lose, it’s going to be something reasonable. Their goal is to try to be reasonable. (Arbitrators have) seen crazy jury verdicts their whole life from time to time. And so, and they know the law on the facts. So normally I would expect, you know, a very reasonable sound fair resolution when I go to an arbitrator.

You can only appeal the decision of the arbitrator under extreme circumstances. But I would just like to say, in the vast majority of arbitrations, no, you cannot appeal. Don’t try. You knew you’re getting into when you went in, this is it. The arbitrator makes a decision. The decision is final. There’s no appeal. And unlike a trial, it’s just over. Maybe one time in almost 40 years, we’ve had a situation where we had a specially selected arbitrator with, you know, questionable credentials in a contract where we had to fight it. But for the most part, when you go under that arbitrator, you should know they’re experienced and they have to make tough decisions.

Ultimately, from the outset, we prepare every case as if it’s going to trial. And sometimes arbitration is actually the best venue for our clients to achieve their goals. Because we start with a thorough, well-documented chronology, a mastery of available damages, and all of our philosophies on how to prepare a case, we’re ready to go to trial. And we’ve tried lots of cases. If it’s a trial, we really enjoy jury trials. If it’s an arbitration, we’ve been around so long, we’re comfortable with the arbitrators.” – Dan Watkins, Founding Partner

When the stakes are this high you need an experienced, proven San Diego business arbitration attorney to represent and protect your interests.  The Watkins Firm has more than 40 years of experience resolving business disputes through our unique approach to litigation and representing clients in business arbitration cases.  Ask about our well established track record of success and the process the Watkins Firm will follow in order to achieve the best possible outcome in your case.

We invite you to review our Podcast Episode 11 – Resolving Business Disputes as well as the strong recommendations of our clients and contact the Watkins Firm or call 858-535-1511 for a complimentary consultation today.

Meet Daniel Watkins:

Daniel W. Watkins is a true people person who sincerely listens. He cares deeply about what others are going through.  Dan enjoys digging into the facts and finding creative solutions to problems.  He contributes his insights candidly and constructively.

Dan’s interest in people make him deeply invested in every relationship and his exuberant personality makes him a true litigator. Dan fights for his clients with a fierce and calculated commitment.

Dan has practiced in the areas of business, medical practices and healthcare business, high tech/science, real estate and employment defense law since 1987. He is a trusted litigation strategist and true trial attorney with over 50 jury and bench trials to his credit. Dan has successfully represented both large companies and individuals and achieved substantial victories in well-publicized trials throughout California and the U.S.

He is experienced in business and corporate formation and administration, as well as all forms of alternative dispute resolution, including binding arbitration and mediation.

THE ROAD TO BECOMING A BUSINESS LAWYER AND LITIGATOR

Dan has almost 40 years of experience working with, for and against some of the largest insurance companies in the country. He has successfully tried and litigated cases in the areas of Healthcare Compliance, Commercial Litigation, Unfair Business Practices, Fraud, Breach of Contract, Battery, Premises Liability, Product Defect, Medical Malpractice, Discrimination, Sexual Harassment, Construction Defect, as well as Unfair Competition, Defamation, and Trade Secrets.

In December 2003, Dan commenced litigation against Health South Surgery Centers-West, Inc and its’ subsidiaries, exposing the company’s extensive mismanagement and misconduct of its’ surgery centers. Dan has also been asked by some of California’s largest municipalities and corporations to conduct legally required investigations into matters involving alleged employment discrimination and harassment.