Non-binding arbitration
Encyclopedia
Non-binding arbitration is a type of arbitration
in which the arbitrator makes a determination of the rights of the parties to the dispute, but this determination is not binding upon them, and no enforceable arbitration award
is issued. The "award" is in effect an advisory opinion of the arbitrator's view of the respective merits of the parties cases. Non-binding arbitration is used in connection with attempts to reach a negotiated settlement. The role of an arbitrator in non-binding arbitration is, on the surface, similar to that of a mediator in a mediation
. However, the principal distinction is that whereas a mediator will try to help the parties find a middle ground to compromise at, the arbitrator remains totally removed from the settlement process and will only give a determination of liability and, if appropriate, an indication of the quantum of damages
payable.
Subsequent to a non-binding arbitration, the parties remain free to pursue their claims either through the courts, or by way of a binding arbitration, although in practice a settlement
is the most common outcome. The award and reasoning in a non-binding arbitration is almost invariably inadmissible in any subsequent action in the courts or in another arbitration tribunal.
Non-binding arbitration is utilised mostly in the United States
and Canada
. It is largely unknown in Europe, although in the United Kingdom
there is a practice of parties who are seeking a settlement to jointly instruct a Queen's Counsel
for an opinion on the merits and likely quantum of a claim, and then to negotiate on the basis of the views expressed in that opinion.
Arbitration
Arbitration, a form of alternative dispute resolution , is a legal technique for the resolution of disputes outside the courts, where the parties to a dispute refer it to one or more persons , by whose decision they agree to be bound...
in which the arbitrator makes a determination of the rights of the parties to the dispute, but this determination is not binding upon them, and no enforceable arbitration award
Arbitration award
An arbitration award is a determination on the merits by an arbitration tribunal in an arbitration, and is analogous to a judgment in a court of law...
is issued. The "award" is in effect an advisory opinion of the arbitrator's view of the respective merits of the parties cases. Non-binding arbitration is used in connection with attempts to reach a negotiated settlement. The role of an arbitrator in non-binding arbitration is, on the surface, similar to that of a mediator in a mediation
Mediation
Mediation, as used in law, is a form of alternative dispute resolution , a way of resolving disputes between two or more parties. A third party, the mediator, assists the parties to negotiate their own settlement...
. However, the principal distinction is that whereas a mediator will try to help the parties find a middle ground to compromise at, the arbitrator remains totally removed from the settlement process and will only give a determination of liability and, if appropriate, an indication of the quantum of damages
Damages
In law, damages is an award, typically of money, to be paid to a person as compensation for loss or injury; grammatically, it is a singular noun, not plural.- Compensatory damages :...
payable.
Subsequent to a non-binding arbitration, the parties remain free to pursue their claims either through the courts, or by way of a binding arbitration, although in practice a settlement
Settlement (law)
In law, a settlement is a resolution between disputing parties about a legal case, reached either before or after court action begins. The term "settlement" also has other meanings in the context of law.-Basis:...
is the most common outcome. The award and reasoning in a non-binding arbitration is almost invariably inadmissible in any subsequent action in the courts or in another arbitration tribunal.
Non-binding arbitration is utilised mostly in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
and Canada
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
. It is largely unknown in Europe, although in the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
there is a practice of parties who are seeking a settlement to jointly instruct a Queen's Counsel
Queen's Counsel
Queen's Counsel , known as King's Counsel during the reign of a male sovereign, are lawyers appointed by letters patent to be one of Her [or His] Majesty's Counsel learned in the law...
for an opinion on the merits and likely quantum of a claim, and then to negotiate on the basis of the views expressed in that opinion.
In fiction
- In the Michael CrichtonMichael CrichtonJohn Michael Crichton , best known as Michael Crichton, was an American best-selling author, producer, director, and screenwriter, best known for his work in the science fiction, medical fiction, and thriller genres. His books have sold over 200 million copies worldwide, and many have been adapted...
book, DisclosureDisclosure (novel)Disclosure is a novel by Michael Crichton, published in 1994. The novel is set in a fictional high tech company, just before the beginning of the dot-com economic boom...
(and in the 1994 film of the bookDisclosure (film)Disclosure is a 1994 thriller directed by Barry Levinson, starring Michael Douglas and Demi Moore. It is based on Michael Crichton's novel of the same name.The cast also includes Donald Sutherland, Rosemary Forsyth and Dennis Miller...
), the sexual harassment claim relating to the lead character, Tom Sanders, is subject of a non-binding arbitration, which finds in his favour, but the other parties reject the determination.