Written by Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a New Jersey Arbitration Attorney
What exactly is arbitration and how should you approach it. Let me give you some vocabulary terms and general background first.
Arbitration cases are exploding in New Jersey and across the country. The reasons are simple. More and more companies, employers, service providers, consumers, insurance companies, and contractors are placing mandatory arbitration clauses in their contracts. The courts here and in other states are enforcing these mandatory arbitration clauses as a way of reducing the backlog of cases pending before them. As a result, there is an increasing need for arbitration lawyers and arbitration law firms who are experienced in the ins and outs of NJ arbitration proceedings.
Why select an experienced arbitration attorney instead of just any lawyer or law firm? Because arbitration is different than litigation in so many ways, and because an experienced arbitration lawyer with an experienced NJ arbitration law firm will know how to maneuver your case in strategic ways that other law firms have no clue, and because arbitration awards are so difficult to reverse an appeal, I urge you to contact us first to discuss your case. Here at Hanlon Niemann, you will find the arbitration attorneys and staff to be attentive, diligent and focused on winning your case, and giving you the sound advice that only our 30+ years of experience can offer.
Arbitration has been defined as the “voluntary referral of a dispute to … an arbitrator or arbitrators chosen by the parties who agree the decision will be final and binding upon them.” Arbitration is an agreed upon substitution of the legal system with an alternative decision maker(s).
Arbitration and alternative dispute resolution (“ADR”) are today commonly used to resolve disputes. Litigation in the traditional courtroom setting can take many years to resolve and the costs of litigation are high. Parties to disputes have created alternative venues to the courts.
Arbitration laws can be found in the New Jersey Arbitration Act and NJ case law. Since arbitration is contractual, the courts will enforce mandatory arbitration clause in contracts. In fact, there is a specific statute in New Jersey that makes a mandatory arbitration clause in a contract enforceable. There is virtually no way around it. This statute (NJSA 2A:24-1) states:
“A provision in a written contract to settle by arbitration a controversy, whether the controversy arise out of contract or otherwise, shall be valid and enforceable, except as may other exist at law or in equity.”
“Two or more persons may agree in writing to submit to arbitration a controversy existing between them, whether the controversy arises out of a contract or the refusal to perform all or a part of a contract or any other matter.”
In mandating the use of arbitration to address future disputes in a contract or other legal relationships, the parties can by agreement limit or expand the scope of the arbitration proceeding but they are bound to go to arbitration in accordance with their agreement. Our courts will not rewrite a contract between parties to limit or broaden the scope of arbitration or otherwise make it more fair, efficient or forceful.
Perhaps your agreement is unclear whether your disagreement or issue is subject to arbitration. Maybe you read the contract or governing document in such a way that you are not bound to arbitrate the matter. If there is a dispute whether the arbitration of a particular issue is mandated under a contract, that dispute must generally be resolved by the courts of New Jersey, subject to the terms of the agreement. The courts in NJ will read and interpret the arbitration language in the contract and evaluate whether the claim falls within the scope of mandatory arbitration. However, the court will not rule on the merits of the dispute, only whether the case is subject to mandatory arbitration.
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