Arbitration is part of alternative dispute resolution (ADR). It is often a faster and less costly alternative to a trial. With regard to Arbitration in New Jersey, the courts have instituted a mandatory arbitration system for certain kinds of cases including all personal injury actions except for professional malpractice and products liability cases.
The cases that are exempt from mandatory arbitration generally involve complex issues regarding proof of liability, evidence, expert testimony and complicated factual circumstances. Many personal injury cases and those concerning contract and commercial actions, after being screened, have typically simpler issues of fact and law.
The parties in any kind of action, however, may stipulate to arbitration, which may be binding or non-binding.
Court-Ordered Arbitration
In cases subject to arbitration, the court will issue a notice to the parties that an arbitration hearing will be scheduled within 60 days after the expiration of the discovery period. A list of arbitrators is provided, all of whom are retired New Jersey judges or neutral attorneys with at least 7 years of experience in the area of law subject to the arbitration. The parties may stipulate to one or two arbitrators or have one designated by the court.
Rules Governing Arbitrations
At least 10 days before the hearing, each side submits to the arbitrator and to each other an arbitration brief, which presents their version of the factual and legal issues, damages claims and defenses. The arbitrator has the powers of a judge in deciding what evidence may be admissible and determining any issues of law, and has the right to subpoena witnesses and documents. The arbitrator also may administer an oath to witnesses before they testify.
An arbitrator is not compelled to follow the rules of evidence regarding introduction of evidence and foundational issues in many cases. The parties do not need to introduce live testimony and may submit affidavits, deposition transcripts, bills and medical reports and records, police reports and employment records so long as the opposing party has received copies at least one week before the hearing.
Arbitrator Awards/Penalties
The arbitrator has 10 days to issue an award or decision, which is not appealable. Any party can reject the award or decision by filing a Notice of Rejection and Demand for Trial De Novo within 30 days of the decision’s issuance.
The party who rejects the monetary award may, however, be liable for the costs of the arbitration if the case proceeds to trial and the verdict is not at least 20 percent higher than the arbitration award. If no money was awarded in the arbitration, the plaintiff may escape liability for costs by obtaining an award of at least $250.
Stipulated or Contractual Arbitration
A contract may contain a mandatory arbitration clause, which New Jersey law will uphold. Two parties may also stipulate to arbitrating any controversy arising between them regarding a contract and its obligations.
Many contractual agreements or provisions contain language whereby the arbitration is to be held before the American Arbitration Association, which has its own rules governing how arbitrations are handled. The AAA has retired judges who preside over these arbitrations.
The parties may, of course, use whomever they wish to arbitrate their case and may use practicing or retired attorneys or judges. Many arbitrations abide by the rules set forth in the Uniform Arbitration Act.
These arbitrations are binding and the decisions are enforceable under New Jersey and federal laws without appeal unless there are very unusual circumstances. The rules regarding evidence and discovery may be decided among the parties or they may have to abide by the arbitration association rules or those of the Uniform Arbitration Act. For example, JAMS, or Judicial Arbitration and Mediation Services, have expedited rules for cases submitted to them.
Further Information
If you need any further information or require the services of an Arbitration attorney in New Jersey please do not hesitate to contact us.