Binding arbitration is a type of dispute resolution where both parties in a personal injury case agree to have a neutral arbitrator make a final decision about their case, and that decision is legally enforceable and cannot be appealed or overturned. Unlike regular arbitration where the parties might be able to reject the decision and go to court, binding arbitration means you must accept whatever the arbitrator decides, even if you strongly disagree with the outcome. This process replaces going to trial with a judge and jury, and once you agree to binding arbitration, you typically give up your right to sue in regular court.
Many contracts, such as employment agreements, nursing home contracts, or consumer service agreements, contain binding arbitration clauses that require personal injury disputes to be resolved through this process rather than traditional lawsuits. While binding arbitration can be faster and less expensive than going to court, critics argue that it often favors businesses and insurance companies because arbitrators may be more conservative in awarding damages than sympathetic juries. The key drawback is that if you believe the arbitrator made a mistake or was unfair, you have very limited options to challenge their decision, unlike court judgments which can usually be appealed to higher courts.
