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How to Become an Arbitrator: All You Need to Know

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Arbitration is the way to go if you’ve ever wanted to avoid courtrooms but still have to come to a legal agreement. This involves an arbitrator that helps you and the other party to a fair resolution. Although the proceedings are similar to a trial, this is less formal and more private.

If this sounds like an exciting career, this article will explain what an arbitrator is, what they do, and how you can become one.

What Is an Arbitrator?

what-is-an-arbitrator

An arbitrator is also known as a mediator, a neutral legal third party who works independently in a dispute to resolve a problem fairly. Arbitrators are more concerned with settling cases such as divorces or real estate disputes without going to court.

Essentially, you might hire an arbitrator to help with your personal or professional disagreements, as this is a cheaper and faster way than filing a lawsuit. Most arbitrators can be lawyers, judges, or business people working part-time or starting to change their careers.

For example, if you’ve ever signed a consumer contract, an employment agreement, or a lease, you’ve probably seen a provision known as an ‘’arbitration clause’’. This legal clause says that in cases when there’s a dispute between two parties, the arbitration process is used to resolve the conflict.

Additionally, in these situations, both parties rely on the arbitrator, also known as a ‘’neutral’’, since he must make an unbiased decision. That said, arbitration is considered another option to file a lawsuit while an arbitrator works on settling disagreements.

What Does an Arbitrator Do?

what-does-an-arbitrator-do

Besides finding a resolution between two parties, an arbitrator does much more than that. They organize and lead the negotiations about an issue, so you don’t go to court. 

An arbitrator has many responsibilities, such as:

  • Meeting with each party to explain how arbitration takes place
  • Reviewing both parties’ evidence
  • Interviewing witnesses to acquire information
  • Arranging discussions
  • Researching laws and policies to predict the outcomes
  • Creating settlement agreements for both parties
  • Deciding which party is accountable and what they owe to the other party
  • Writing decision statements outlining the findings if the case ends up in court
  • Encouraging collaborative communication

So, instead of appearing before a judge, each party decides to work with an arbitrator and present their case. Next, the arbitrator weighs the pros and cons of each party based on the laws that apply to determine liability.

However, the main reason for using arbitration is that it’s a quicker and less expensive proceeding. This process is often used for real estate, commercial disputes, and divorces because it doesn’t cost as much and is not part of the public record.

Cases can be straightforward or complicated. That’s why arbitrators need to have experience in many subjects, such as engineering, construction, accounting, etc. This is one of the reasons why a second career may be suited to this role since arbitrators need a knowledgeable background. 

How Do You Become an Arbitrator?

how-do-you-become-an-arbitrator

While anyone can become an arbitrator, there are a few requirements and steps that you need to follow to get hired:

Get a bachelor’s degree

Earning a bachelor’s degree is the first step to becoming an arbitrator. The minimum education requirement is a four-year undergraduate degree. During your education, you can take courses that help you prepare for an arbitrator career like ethics, consumer law, psychology, or public speaking.

Most arbitrators are experienced lawyers or business professionals who are experts in a specific industry or body of law. They can also have a law degree or another degree in an area of expertise, such as business, political science, social work, or public policy.

If you want to gain the necessary skills to become a successful arbitrator, extracurricular activities are beneficial because you can list them on your resumé when applying for jobs. These activities can include leadership positions or debate clubs. 

Pursue an advanced degree

An advanced degree is ideal if you want to improve your job opportunities. Since most arbitrators are attorneys or business professionals, an advanced degree such as a Juris Doctor (JD) or Master of Business Administration (MBA) might be two of the most relevant options.

Depending on your state, you might be required to have an advanced degree to become an arbitrator. Usually, a law degree takes up to three years to complete, while an MBA takes two years. However, law schools provide more opportunities for specializing in arbitration.

A master’s in conflict resolution or dispute would be perfect because it includes courses in resolution, negotiation, cultural issues, and other arbitration subjects.

Gain work experience and training

Another essential qualification step for arbitrators is gaining experience in the legal or industry specialty they will be dealing with disputes. As an arbitrator, you can apply for internships or entry-level jobs as these allow you to work under the supervision of an experienced arbitrator, businessperson, or lawyer.

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It’s best to opt for positions that provide you with experience and industry knowledge in whatever field you want to specialize in, such as finance or construction. Usually, arbitrators need between five to fifteen years of experience before applying for arbitration panels.

Additionally, organizations like the American Arbitration Association (AAA) require experience in arbitration, dispute resolution, and three letters of recommendation. On the other hand, the Federal Mediation and Conciliation Service (FMCS) requires submitting five prior arbitration decisions and five references if you’ve completed the FMCS’s 40-hour training course.

Complete licensing and certification

Aspiring arbitrators must become licensed lawyers after completing law school, which involves passing several exams. However, this depends on your state because the requirements vary. The licensure is achieved after obtaining a law degree, applying for admission to the state bar association, and passing the bar exam.

Others who want to specialize in real estate or construction also need to get licensed to look for work experience as a realtor or contractor.

Additionally, professional organizations require you to have some experience to join, such as the National Academy of Arbitrators, AAA, or FMCS.

What Is the Selection Process of an Arbitrator?

The selection process of an arbitrator is one of the most significant decisions made in investment arbitration. An arbitrator is a chosen independent third party experienced in handling arbitration. The parties ask how to find information that may help them assess an arbitrator for nomination to a Tribunal.

The selection procedure depends on:

  1. The expertise of the arbitrator in international investment law and public international law
  2. The arbitrator’s experience, especially in investment arbitration
  3. The arbitrator’s expertise in a specific area of law or subject matter
  4. Language abilities (ability to read documents; communicate with the counsel, ability to write clear decisions)
  5. Capacity to work with the other Tribunal members
  6. Availability to address the case fast

Arbitrator Job Outlook and Salary

Arbitrators get a decent salary, but this depends on their years of experience, area of expertise, and reputation. Arbitrators who have law degrees earn more than those without. The median annual salary for arbitrators was $49,410 in 2021, with the lowest 10% earning $29,990 and the highest 10% making over $110,350.

Conclusion

Becoming an arbitrator is a great career choice if you tend to have communication, listening, and decision-making skills. If you know how to negotiate and make unbiased decisions, you’re one step ahead of becoming an arbitrator.

With some help from experienced lawyers or legal professionals, you can acquire knowledge and experience in the field you want to specialize in and become a licensed arbitrator, though a little push and commitment are necessary. 

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