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Arbitration in Product Liability Lawsuits

What is an arbitration phrase? How does it affect product liability lawsuits?

Product liability claims tend to be complicated, and many factors can contribute to them, depending on the product and the evidence that is available or provided. When there cannot be a negotiation reached, there are usually two options; to go to trial or to go into arbitration.

Due to the overburdened United States court system, a growing number of claims are going into arbitration. This is where an arbitrator will hear all sides to a case and give his or her decision on fault.

How an arbiter is chosen and how the process differs from filing a lawsuit?

In the initial phase, both sides will decide on an arbitrator. Both sides will create a list of potential choices; then these options are eliminated one-by-one until an arbiter is chosen. Arbitrators are usually either independent and provide these services on their own, or they come from one of the three large arbitration associations.

Most arbitrators will have years of experience with working in law; the majority will be former attorneys or judges. There will be a fee associated with hiring an arbitrator. The fee is usually a percentage of whatever the settlement is or what would have been.

However, the fee is usually much cheaper than what an attorney would charge. If the arbiter is independent, he or she will collect the fee. If the arbiter is with an agency, the agency will collect the fee. It is important that both sides agree on the assignment of the arbiter. The rules for arbitration are simpler and are easier to follow than a court case. Also, parties can carry on the proceedings and work out a settlement in private.

Why is an arbitration is more appealing for both parties in a product liability claim than filing a lawsuit?

Product liability claims are very complex and require different evidence in terms of branch of warranty, strict liability, and negligence. In addition, states determine product liability laws. The corporation that produced the product may have a lobby and/or a lot of money supporting them. Also these cases will take a lot of time to go through the courts.

The arbitration will take less time than a lawsuit, possible even taking a third less time to reach a decision than a court trial. Also, the money that is spent to reach an agreement will be much less, as trials are heavily dependent on expert testimony. Lastly, there are no pre-trial or trial motions to consider in an arbitration.

Does a claimant has the option to go to court if they believe they didn't receive a fair decision?

Claimants can go to court if they feel like the decision was not fair and the arbitration agreement that they signed is non-binding. However, claimants should have evidence of the arbiter’s actions, or the decision is likely to be upheld. There should be evidence that the arbitrator was unscrupulous, was biased towards one side, did not review all of the evidence and testimony presented, or was shown to be corrupt.