Arbitration vs. litigation

Maritime law is equipped to deal with all types of disputes. It has to be, given the things that can go wrong at sea.

A ship can collide with another ship, or its cargo can be damaged or lost overboard. If a ship runs aground, the owner and salvor may disagree about whether the rescue is a salvage effort or whether it’s an ordinary tow. The ship may then lose money because of misunderstandings about when repairs were to be completed by a shipyard. With the potential for things to go wrong, the need for an effective means of resolving disputes is obvious.

An expensive lawsuit is not always the best way to resolve a problem. Arbitration is one form of an alternate dispute resolution (ADR) that’s available. In arbitration, the parties submit their dispute to a marine arbitrator, or panel of marine arbitrators. Arbitrators have the authority to render a binding decision.

Arbitrators may be attorneys but they don’t necessarily need to be. A good arbitrator will generally possess expertise, experience and insight about the subject matter. He or she may be a retired captain, engineering officer, or cargo manager. One of the most important qualities for an arbitrator is impartiality. Both sides should feel they have a shot at a fair resolution of their dispute. Another important quality – where the situation merits it, and not every situation does – is the ability to find a solution that is tenable for everyone.

Arbitration has traditionally been used in disputes involving marine salvage, shipyard construction and repair jobs, sales contracts, and cargo claims. A big advantage of arbitration is that it saves money. In litigation, discovery (the process where attorneys demand information and documentation in preparation for trial) can be ruinous. Although information must still be gathered for arbitration, the process is generally not as hostile and contested.

Arbitration also provides fewer opportunities to abuse the legal system. In litigation, one side might badger the other with malicious tactics, where the object is solely to harass. This can be done by filing unnecessary motions, demanding the right to question people who have no apparent connection to a dispute, or serving subpoenas for unrelated records. With arbitration, there is less of an opening for such abuses.

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Workboat Staff

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