Arbitrators are not
bound by precedent and have great leeway in such
matters as active participation in the proceedings,
accepting evidence, questioning witnesses, and
deciding appropriate remedies. Arbitrators may visit
sites outside the hearing room, call expert
witnesses, seek out additional evidence, decide
whether or not the parties may be represented by
legal counsel, and perform many other actions not
normally within the purview of a court. It is this
great flexibility of action, combined with costs
usually far below those of traditional litigation,
which makes arbitration so attractive.
Arbitrators have wide latitude in crafting remedies
in the arbitral decision, with the only real
limitation being that they may not exceed the limits
of their authority in their award. An example of
exceeding arbitral authority might be awarding one
party to a dispute the personal automobile of the
other party when the dispute concerns the specific
performance of a business-related contract.
It is open to the parties to restrict the possible
awards that the abitrator can make. If this
restriction requires a straight choice between the
position of one party or the position of the other,
then it is known as pendulum arbitration or final
offer arbitration. It is designed to encourage the
parties to moderate their initial positions so as to
make it more likely they receive a favourable
decision.
No definitive statement can be made concerning the
credentials or experience levels of arbitrators,
although some jurisdictions have elected to
establish standards for arbitrators in certain
fields. Several independent organizations, such as
the American Arbitration Association, offer
arbitrator training programs and thus in effect,
credentials. Generally speaking, however, the
credibility of an arbitrator rests upon reputation,
experience level in arbitrating particular issues,
or expertise/experience in a particular field.
Arbitrators are generally not required to be members
of the legal profession.
To ensure effective arbitration and to increase the
general credibility of the arbitral process,
arbitrators will sometimes sit as a panel, usually
consisting of three arbitrators. Often the three
consist of an expert in the legal area within which
the dispute falls (such as contract law in the case
of a dispute over the terms and conditions of a
contract), an expert in the industry within which
the dispute falls (such as the construction
industry, in the case of a dispute between a
homeowner and his general contractor), and an
experienced arbitrator.
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