Arbitration, also known as alternate dispute resolution (ADR), is a straightforward, expedited process. Whether you have experience with the process or this is your first time, there are some things to know relating to New York debt collection.
In the event of a dispute, contracts often stipulate resolution through arbitration. To enforce your collection rights, arbitration becomes the next step unless your contract specifically excludes arbitration for fee disputes.
How Is the Arbitration Process Started?
The process starts when you file an intent or offer to arbitrate along with the required fee with the administrative office handling the arbitration. Generally, the administrative office sends notice to the other parties involved of your desire to arbitrate the dispute.
Where Does Arbitration Take Place?
The terms of your contract usually determine where you will arbitrate: the state (venue) and the entity, i.e. the administrative body that will govern the arbitration. Unless all parties to the fee dispute agree in writing to change the location, there is a contractual obligation to adhere to the place and terms set forth in your agreement.
What Are the Costs Involved to Go to Arbitration?
The administering tribunal usually requires a filing fee or case management fee. The amount of the fee may differ. It may be a flat fee or a fee based on the amount in contention. In addition, the parties must compensate the arbitrator at an hourly rate that can range from $450 – $1,000 per hour. There may also be an additional fee due to the tribunal based upon the total compensation paid to the arbitrator.
Can I Recoup the Costs of Arbitration?
The costs for this action, and possibly the fees paid to the arbitrator, may be part of a potential award. If your contract provides for arbitration of disputes, make sure that the clause also states that you receive reimbursement for any of your fees and costs in addition to the award.
Will the Delinquent Customer Be Required to Pay a Portion of the Fees?
If the contract calls for the parties to share the cost of arbitration, they should share the costs/fees. However, be careful. Understand what happens if and when the delinquent customer does not pay their requisite portion.
Can You Enforce the Arbitration Award to Obtain Payment?
Obtaining the award is a crucial step, but not the last step in the process. Collection of the award requires first making a special application to the court to confirm the award and convert it into a judgment. Once you have a judgment, you then can execute on the judgment.
How Long Will It Take and When Do I Get My Money?
- Obtaining the arbitration award: For an average debt collection case – not overly technical and not requiring expert testimony – expect 4 – 6 months from the initial filing through receipt of the award.
- Confirming the award and converting it to a judgment: Expect it to take between 60 and 180 days. That is for a court order/decision on an unopposed application to confirm the award. The time varies on whether the court requires the appearance of counsel and perhaps oral argument on the application and the length of time it takes after that for the court to issue the order.
- Filing a judgment: We submit the order to the clerk for entry. That time differs from county to county.
- Executing the judgment: We then execute on the judgment and seize assets if the debtor does not pay.
FFGN will file the case for you, help you through selection of arbitrators, impartial third party(s), to hear and decide the dispute. This process is less formal than litigation. One arbitrator or a panel of three arbitrators will render a decision. Arbitration has a special set of rules, procedures, and regulations. Arbitration costs depend on many variables. A special proceeding confirms the award. FFGN will be with you every step of the way. You will have the benefit of our deep experience.