Frequently Asked Questions
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Arbitration

  1. What is arbitration?
  2. How long does an arbitration take?
  3. How is mediation different from arbitration?
  4. How are arbitrators chosen?
  5. What are the arbitrators duties?
  6. Can an arbitration award be appealed?
  7. How does one become an arbitrator?

Questions & Answers

What is arbitration?
Answer:
Arbitration is a legal proceeding, more informal than a trial setting, during which both sides in a dispute offer their testimony and evidence to a neutral party, called the arbitrator. This "referee" is often a retired judge or an attorney of long experience. After a hearing of both sides, the arbitrator decides upon an award, a certain amount of money, to be given to one of the two parties.
This arbitration can be either "binding" or non-binding, depending on what kind of arbitration it is. In the case of personal injury claims, there are generally two types of arbitration. The first is court-ordered mandatory arbitration in which the award is not binding (though it is important in settling the dispute). In this type of arbitration, either side can reject the arbitrator’s award. If this rejection occurs, the matter proceeds to jury trial where no reference can be made to the arbitrator's award. In the case of binding arbitration, the award is final. The arbitrator's award is usually paid very quickly after it is rendered. Other kinds of disputes can also be settled through arbitration, if the parties involved so agree.

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How long does an arbitration take?
Answer:
Typical cases that go to arbitration such as auto accident claims are usually resolved after a half-day or, at most, a full day. Cases with multiple parties often last longer: Clients should add at least an hour to the arbitration time for each additional party.

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How is mediation different from arbitration?
Answer:
A mediator normally has no authority to render a decision. It's up to the parties themselves -- with the mediator's help -- to work informally toward their own agreement. An arbitrator, on the other hand, conducts a contested hearing between the parties and then, acting as a judge, rends a legally binding decision. Arbitration resembles a court proceeding: Each side calls witnesses, presents evidence and makes arguments. Although arbitration has traditionally been used to resolve labor and commercial disputes, it is growing in popularity as a quicker and less expensive alternative to going to court.

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How are arbitrators chosen?
Answer:
Unless a single arbitrator is to be appointed, all panels submitted by the commissioner shall contain seven names.  When the parties' arbitration agreement provides for panels of fewer than seven names, the parties may use the striking procedures in subpart 5 to reduce the size of a seven-member panel.  In assembling panels, the commissioner shall use a random selection system that results in a reasonably equal number of opportunities for referral among roster members who have been on the roster for three or more years.  When possible, no more than three arbitrators who have been on the roster for less than three years shall be included on a single panel, but the commissioner shall provide greater referral opportunities for those individuals.  In assembling panels, the commissioner shall seek to avoid potential conflicts of interest and shall include or exclude roster members pursuant to mutual requests of the parties. The commissioner must consider geographic location or unique and special circumstances and technical expertise when the parties request that those factors be considered.  At least five members of the panel must be residents of Minnesota.

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What are the arbitrators duties?
Answer:
It is the duty of the arbitrators to appoint a time and place for hearing the parties and making their award. They must give the parties three days notice and if no cause is shown for a continuance, they must proceed to hear and determine the matters referred to them and make their award in writing. The arbitrator must sign this document with a copy thereof delivered to each of the parties, their agents, or attorneys and the fact and date of such delivery endorsed on the original.

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Can an arbitration award be appealed?
Answer:
Either party may appeal from an award under this article. Notice of the appeal to the appropriate appellate court shall be filed within 10 days after receipt of notice of the award and shall be filed with the clerk or register of the circuit court where the action is pending. If no action is pending, then it should be filed in the office of the clerk or register of the circuit court of the county where the award is made. The notice of appeal, together with a copy of the award, signed by the arbitrators or a majority of them, shall be delivered with the file of papers or with the submission, as the case may be, to the court to which the award is returnable. At this time, the clerk or register shall enter the award as the judgment of the court. Thereafter, unless within 10 days the court shall set aside the award for one or more of the causes specified in Section 6-6-14 (an award made substantially in compliance with the provisions of this article is conclusive between the parties thereto and their privies as to the matter submitted and cannot be inquired into or impeached for want of form or for irregularity if the award determines the matter or controversy submitted, and such award is final, unless the arbitrators are guilty of fraud, partiality, or corruption in making it).At this time, the judgment shall become final and an appeal shall lie as in other cases. In the event the award shall be set aside, such action shall be a final judgment from which an appeal shall lie as in other cases.

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How does one become an arbitrator?
Answer:
The Standing Committee may conditionally approve and submit to the arbitration organization nominees to the panel of arbitrators quarterly in March, June, September and December of each year, commencing March 1988. These nominees then may be included in the panel of arbitrators that the Standing Committee shall nominate annually for approval by the Supreme Court. The Standing Committee to the arbitration organization shall certify the panel appointed by the Supreme Court.

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