When legal disputes occur, the parties involved sometimes use a third party to settle the issue without going to court. Arbitrators are legal professionals who help two or more people resolve a dispute outside of a judiciary court by holding private, confidential meetings. If you possess excellent decision-making and communication skills and you have an interest in a legal career, it may be beneficial for you to learn how to become an arbitrator.
What Is Arbitration?
Arbitration is a mechanism for resolving disputes between investors and brokers, or between brokers. It is overseen by the Financial Industry Regulatory Authority (FINRA), and the decisions are final and binding. Arbitration is distinct from mediation, in which parties negotiate to reach a voluntary settlement, and decisions are not binding unless all parties agree to them. Arbitration is not the same as filing an investor complaint, in which an investor alleges wrongdoing on the part of a broker, but has no specific dispute with that broker, for which the investor seeks damages
How Arbitration Works
arbitration is similar to a lawsuit but may be preferable for all parties due to the lower costs and time commitments involved.
How to become an arbitrator
1. Review your state’s requirements- States have different requirements to become an arbitrator, so it’s beneficial to research the specific educational or experience requirements to become one in your state. For example, some states require arbitrators to have experience working as attorneys for a certain number of years, while others may only require arbitrators to possess a bachelor’s degree. Determining what your state requires can help you become better prepared to practice arbitration.
2. Earn an undergraduate degree- The minimum education requirement to become an arbitrator is typically a bachelor’s degree from a four-year institution. Some arbitrators have a bachelor’s degree in law, while others have degrees in another field, such as business, English, history, political science, public policy or social work. While pursuing your bachelor’s degree, consider taking courses that can help prepare you for an arbitrator career, such as consumer law, ethics, psychology or public speaking.In addition, consider participating in extracurricular activities while in college. These can help you gain some of the skills that are necessary to be a successful arbitrator, which you can list on your resume when applying for entry-level arbitration positions. Extracurricular activities relevant to arbitration may include debate clubs or leadership positions in student organizations. You may also want to consider learning another language if you plan to specialize in international arbitration.
Skills for arbitrators
Arbitrators need both hard and soft skills to negotiate with different parties and make unbiased decisions. Hard skills consist of the technical legal knowledge that informs their decisions, while soft skills may include all the personal characteristics that help them resolve disputes effectively. Common arbitrator skills may include the following:
- Communication: It’s important for arbitrators to explain laws and legal issues clearly and in terms that both parties involved in a dispute can understand. Communication skills also enable them to convey important information in writing in case a dispute ends up going to court.
- Listening: These legal professionals need strong active listening skills they can apply when meeting with clients so they can understand each side of the case. These skills can help them process all the relevant facts and make informed judgments.
- Decision-making: Arbitrators use facts, evidence, laws and regulations to make neutral decisions quickly and fairly. Decision-making skills help them in ensuring that both sides are able to agree on a constructive solution.
- Interpersonal skills: Since arbitrators work with a wide range of clients and professionals, it’s important that they be approachable and respectful and get along with people easily. Interpersonal skills also help them in building trust with new clients.
- Legal writing: These professionals need strong legal writing abilities so they can create a clear and accurate settlement and decision documents. Legal writing skills include the ability to analyze facts quickly and present written arguments concisely.
- Negotiation: Successful arbitrators have the critical thinking skills and patience to negotiate fair settlements between potentially emotional parties. They also use these skills to strategize effective solutions and reduce misunderstandings between parties.
- Conflict resolution: Arbitrators require exceptional conflict resolution skills to resolve the legal disputes they regularly handle. They use these skills to clarify their clients’ arguments and establish mutually beneficial agreements.
FAQs
What is an arbitrator?
An arbitrator is a neutral third party appointed to resolve disputes between two or more parties outside of the court system. They act as judges in arbitration proceedings, hearing evidence and arguments from both sides and making a binding decision, known as an arbitration award.
What qualifications do arbitrators have?
Arbitrators typically have legal or industry-specific expertise relevant to the disputes they handle. They may be lawyers, retired judges, industry professionals, or individuals with specialized knowledge in areas such as construction, finance, or international trade. Many arbitration institutions have specific requirements for arbitrator qualifications and experience.
How is an arbitrator different from a mediator?
While both arbitrators and mediators help parties resolve disputes, they have different roles and processes. Arbitrators make binding decisions that are enforceable in court, whereas mediators facilitate negotiations between parties and help them reach a mutually acceptable agreement without imposing a decision.
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