In non-binding arbitration an arbitrator hears the dispute and issues an award that becomes final only if neither party demands trial within a specified period. Court-annexed programs frequently mandate it for cases under a value threshold.
Rejection may carry cost consequences.
Alternative Names:
Advisory Arbitration, Court-Annexed Arbitration
Why it Matters?
Cost-shifting on rejection is what gives the process teeth, since many programs impose costs or fees on a party that rejects the award and then fails to improve its position at trial. That penalty converts an advisory proceeding into a meaningful settlement mechanism. The award also provides a neutral assessment that can move a party whose expectations exceed what the case is worth.
Frequently Confused with
Related terms
Frequently asked questions
What happens if a party rejects the award?
What is the practical value?
