How the Arbitration Process
Works in New Jersey

How Arbitration Works in New Jersey

Written by Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a New Jersey Arbitration Attorney

The first issue to address in arbitration is whether you’re bound to arbitration by your contract or an order of the court or voluntary decision to go to arbitration.  Don’t minimize this issue.  Consult with an experienced New Jersey arbitration attorney to evaluate whether arbitration is in your best interests.  As an example, I frequently recommend against arbitration if I can elect out of it for the reasons listed on the following page, Advantages and Disadvantages of Arbitration.  If not and I have to go to arbitration, then I will look to build in as many safeguards as possible to any arbitration hearing to maximize any upside and minimize any downside.

Next comes the selection of the governing Arbitration Association.

In arbitration, most parties use the rules and procedures offered by the American Arbitration Association (“AAA”). The Association publishes its rules, procedures, fees and guidelines online for all to read. In recent years, JAMS/Endispute, have offered the same arbitration services as AAA. The parties, however, are not bound to use any formal organization or its rules and procedures. If both sides agree, the parties can select a mutually acceptable independent arbitrator who will preside over the arbitration proceeding and draft their own guidelines for arbitration which will be binding on the parties and the arbitrator.  There are many qualified professionals including retired judges who can be an arbitrator.  This is much less costly than using an Arbitration Association.  Once you select the association that will govern your proceeding (assuming you go this route), you will be given a menu of arbitration rules and procedures by that association that will govern your proceeding if your contract or binding arbitration clause does not specify the rules and procedures to be applied.  There are specialized rules and procedures available to the parties depending on the type of case being arbitrated.

Within each section of the applicable rules and procedures of each association there is a detailed description of how the arbitration proceeding will be conducted including the order of submissions, types of submissions, selection of each association of the arbitrator(s), claims and defenses, jurisdiction over the parties and witnesses, discovery procedures including any limitation of discovery and exchanges of information, attorney-arbitrator conferences, attendance at hearings, use of experts and any limitation on the use of experts, the conduct of the proceedings, use of evidence or waiver of the rules of evidence, inspections and investigation of evidence, final closing remarks and/or final submissions, scope of award, compensation of arbitrator, etc., and a schedule of fees charged by the association.

The applicable rules and procedures are generally not overly detailed and leave open many potential questions and issues that frequently lead to strife between counsel, thus putting the impartial arbitrator in a quasi-judicial rule to referee the disagreement(s) where possible but ultimately deciding the issue(s) if no agreement can be voluntarily arrived at.  Thus again, the importance of selecting a good arbitrator and precisely defining the scope and limitations of authority can’t be over emphasized.

It is absolutely crucial to a fair and comprehensive arbitration proceeding (when possible) to select the arbitration requirements that will govern the parties and the arbitration in deciding the merits of the case.

 Fred Niemann

You should carefully consider using an experienced NJ arbitration attorney to draft the arbitration language to your contract or if it’s not too late then to represent you before the arbitration proceeding.  To contact an experienced NJ arbitration attorney, call Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at fniemann@hnlawfirm.com.