Which Party Should Bear The Arbitration Costs?

Which Party Should Bear The Arbitration Costs?

Which Party Should Bear The Arbitration Costs?

Arbitration is a dispute resolution technique used by two parties who bought or sold goods or services. An arbitrator is a third person who performs the duties to resolve the dispute and is responsible to announce a final decision after a careful and detailed review of the case. It is highly recommended that parties discuss with one another to end their dispute with a reasonable and favorable solution by themselves. If any of the parties are not able to resolve the matter, then he/she can contact the arbitration office for dispute resolution.

When two parties are planning to file their case to the arbitration office, the first question that comes in the mind is Who Pays for Arbitration.

Structure of Arbitration

The structure of arbitration is set up in the three parts as mentioned below:

Arbitration office

The office

of the arbitrator

Consumer arbitration standard board

Different Types of Fees

There are two basic kinds of expenses paid by the disputed parties.

An administrative cost

Cost of the arbitrator

Both costs are received by the arbitration office. He keeps the administrative charges in the account of the arbitration office and sends the cost of the arbitrator to him after the case is filed by the parties.

Administrative costs are the cost for case filing, hearing of the case, and final decision by the arbitrator.

Costs of the arbitrator include the compensation charges as well as other costs. Compensation charges are those received by an arbitrator for the work he/she will do for the case. Once the case is filed by either of the parties, the arbitrator has to review the application, sends the notice to the other party, decides the day and time, reviews the whole case with evidence, and give the final decision. Other costs of an arbitrator are related to travel expenses if he/she will go from one place to another for dispute resolution, evidence collection, or hearing purposes. If an arbitrator has to travel from one location to another, he/she will bear the expenses related to the meal, hotel room, travel tickets, and time spent on the travel. The disputed party will pay all these costs to the arbitrator. Keep in mind that all charges are non-refundable.

There are other costs too that are associated with the arbitration. These costs are related to attorneys, witnesses required in the case, and their time. Parties have to bear the travel time, travel tickets, meal, hotel expenses, and other expenses of the witnesses if their case need to have them on the day of the hearing. These are the additional expenses and not all cases need to bear them.

Different Kind of Disputes

Most of the cases and issues can be resolved through Arbitration. These disputes are related to consumer goods and services, returning goods, leisure services, misrepresentation of products and services, missing items, defective items, wrong items, wrong products description, and delivery of goods and services.

Who Pays for Arbitration?

Usually, the parties who are involved in the case pay for the arbitration. These costs depend on the case complexity, nature of the dispute, and the amount to claim from the other party. Rules and regulation that applies to your case also have a huge impact on the expenses you need to bear during dispute resolution through arbitration.

Advantages of Arbitration

Dispute resolution through court can be expensive and may need more time than dispute resolution through arbitration. Arbitration techniques save the precious time of their customers and announce the decision as early as possible. They take care of the time and money of their clients. An arbitrator schedule the hearing date and time according to the availability of both parties which is the huge benefit of arbitration.

If A Party Refuse to Pay the Arbitration Fees

As both parties are involved in the case so they both have to pay the expenses for their case resolution. The expenses are always paid in advance at the time of filing the case to the arbitration office. If they don’t deposit the fee in advance, their case will be on hold and will not be initiated. In most arbitration cases, there is one party who considers that he/she should not pay the fee as he should receive a provision from the arbitration office. If there is a party who does so then the arbitration office doesn’t proceed with that case and end the arbitration on the spot.