Written by

Jennifer Carlson

November 19, 2024

Edited by

Tara Farmer

Fact-checked by

Kristen Cramer

Average cost of arbitration

Arbitration costs $2,000 to $6,000 on average, depending on the organization's rates, the arbitrator's experience, and whether it's private or court ordered. For court ordered arbitration, you may only have to pay a filing fee of $100 to $500. Cases that require a hearing cost more than documents-only cases.

There are two main costs in arbitration cases: administrative fees paid to an organization and arbitrator compensation. Both types of fees are initially collected by an organization like the American Arbitration Association (AAA) or Judicial Arbitration and Mediation Services (JAMS). The organization sends the arbitrator their compensation once they're done.

Administrative fees

Most arbitration companies charge $1,000 to $3,500 for administrative fees, depending on whether the case requires an in-person or telephone hearing. Documents-only cases cost less and don't require a hearing.

Arbitrator fees

An arbitrator typically charges $1,000 to $1,500 per case for documents-only cases or $1,500 to $2,500 per day with a hearing. The arbitrator is a neutral third party, usually a lawyer or judge, who helps decide your case. If your case ends early, the arbitration organization may refund some of your money.

What is arbitration?

Arbitration is a legal process for handling disputes privately. A neutral third party called an arbitrator listens to both parties and then makes a decision, or award. This process is faster and often cheaper than hiring lawyers and taking the case to trial.

Not all cases are eligible for arbitration, however. Ineligible cases include:

• Domestic violence, sexual assault, or restraining order cases

• Class action lawsuits

• Cases involving wills, real estate titles, and estates

• Eviction cases

Arbitration lawyer cost factors

These factors affect the overall cost of hiring an arbitrator:

• Experience level: Experienced attorneys or judges tend to charge more than arbitrators with less formal experience, but they may get the job done faster.

• Location: The cost of filing fees and hourly rates vary from place to place and are usually more expensive in highly populated areas.

• Filing fees: Some arbitration companies include the court filing fees in their administrative costs. Others charge a separate $100 to $500.

• Court-ordered vs. voluntary: Hiring arbitration privately usually costs much more than court-ordered cases. In many cases, the court covers everything except the filing fee.

• Abeyance fees: If your case is inactive for over a year, the arbitration company could charge you an annual fee or close the case.

• Hearing room: If you want to use a company-owned room for your hearing, the arbitration company may offer you one for a fee, which varies depending on size and location.

Arbitration vs. mediation

Mediation costs $100 to $500 per hour plus an initial fee of $250 to $500. Like an arbitrator, a mediator listens to both parties and helps them come to a resolution. However, mediators are not allowed to make any final decisions like an arbitrator.

Tips for arbitration meetings

During arbitration, you may experience heightened emotions. Try to listen calmly and communicate using "I" statements. Express concerns in as non-confrontational a manner as possible and avoid the following tension-escalating behaviors:

• Personal attacks

• Unreasonable demands

• Possessive language

• Bringing up unrelated issues

• Blaming statements

• Threats

Arbitration FAQs

How long do cases take to close in arbitration?

An arbitrated case can take anywhere from a few weeks to a year or more to fully settle, depending on the case type. This may sound like a long time, but litigated cases take about 2 years on average in comparison.

Is arbitration equitable?

Yes, arbitration is an equitable way to resolve disputes since the arbitrator is a neutral third party. Arbitrators factor in fairness, while judges typically focus solely on the law.

What is binding arbitration?

Binding arbitration, or mandatory binding arbitration, means that both parties waive their rights to a trial beforehand. They agree that the arbitrator will make the final decision in their case, and they will accept it regardless of the outcome.

Non-binding arbitration is similar to mediation. The arbitrator can make a final decision, but you do not have to follow it if both parties do not accept the outcome.

How does arbitration work?

All arbitration cases follow the same basic steps:

1. Both parties meet with the arbitrator in a neutral location.

2. Each party presents their case. This may include opening and closing arguments, presenting evidence, and even providing witnesses.

3. The arbitrator takes the evidence into account and makes a legally binding decision regarding the case.

Choosing an arbitrator

When searching for an arbitration company near you, follow these steps:

• Compare rates from multiple companies.

• Read reviews on Lawful or Google.

• Choose an arbitrator with experience and a good reputation.

• Pick a location or hearing room that's convenient for both parties.

• Get a written contract before the arbitration begins.

Questions to ask arbitrators

Ask the following questions when looking for a reputable arbitrator:

• How long have you been an arbitrator?

• Are you an attorney or a judge?

• What qualifications or experience do you have?

• What are your hourly rates? How long do we have before hourly rates kick in?

• What kind of statements or evidence should I prepare?

• Will this case need a hearing? How much more will that cost?

• Will this case need more than one arbitrator?

• Is this a binding or non-binding arbitration?

• If it's non-binding, can I have time to consider your decision before agreeing?

• How do you handle heated arguments during arbitration?

• Will you give me a contract in writing?