Why do we include arbitration clause in the Standard Form Agreements / Webinar notice / Holiday party notice September 24, 2018

KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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Why do we include arbitration clause in the Standard Form Agreements / Webinar notice / Holiday party notice
September 24, 2018
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    Save the date:  This years K&K annual party will be on December 14, 2018 from 6:30 to 9:30 PM at Pine Hollow Country Club, East Norwich, NY.  We are going to need a head count this year and restrict the invitation to you and guest.  invite with RSVP will be sent out soon.  Hope to see you. 
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Free Webinar:  September 27, 2018. 12 to 1 PM EST.    Round table discussion on preparing your company for sale [we may get to buying considerations too].  Business brokers and consultants will join the discussion.  Mitch Reitman, Robert Shoremount, Barry Epstein and Rory Russell are our Round Table Experts.  Join us by reserving your spot:  Click here to register:  https://attendee.gotowebinar.com/register/597273801145255682
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Why do we include arbitration clause in the Standard Form Agreements
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    We have included an arbitration clause in our Standard Form Agreements for many years for New York and New Jersey contracts, and for several years we have included the arbitration clause in all contracts.  If you have a Kirschenbaum TM contract it should have the arbitration clause in the Legal paragraph, and if it doesn't, updating the contract is long overdue.
    Why do we include the arbitration clause, what is it and what does it mean and how does it affect you?
    Arbitration is an alternative to litigating in court.  It is sometimes referred to as Alternate Dispute Resolution, but that term could include mediation also.  Mediation is a non-binding procedure to try and resolve a dispute.  If the parties can't agree on a settlement then there isn't one.  Arbitration is binding [unless for some reason the parties agree that it's not]; it resolves the dispute in the same way an adjudication from a court would resolve the dispute.  The decision by an arbitrator is final, though it does have to be confirmed by a court  if you want to turn it into a judgment that you can enforce.  The function of the court however is not to retry your case, but merely to determine if there was a binding arbitration agreement and that the arbitration was not tainted by fraud.  Generally, the decision of an arbitrator will be confirmed even if mistakes in law or fact were made by the arbitrator.  A decision by an arbitrator is not appealable and there is no jury in an arbitration proceeding [unless the parties want one and that never happens.  In fact almost all arbitration provisions will waive jury trials].  
    Arbitration is preferred by courts.  It lessens the burden on the court system because the "trials" are conducted privately by the parties in an arbitration forum.
    Arbitration is designated by contract.  The parties decide when and how to arbitrate and the contract should specify the terms of arbitration.  This is often done by simply referring to a specify arbitration company and providing that its rules will apply.  Unfortunately some arbitration companies have rules that are more arduous than the court system, and unlike the court system, which is "free" to use except for a filing fee and your lawyer's fees, parties have to pay for arbitration, a filing fee and the cost of the arbitrator or arbitrators.  So if your agreement calls for arbitration with 3 arbitrators you may end up paying $2000 to $3000 an hour for their fees.  And that's not just for the actual hearing, but preparation time and decision making time.  
    The Standard Form Agreements [and in fact all the agreements that I write or approve, including Asset Purchase Agreements, Stockholder Agreements, Employment Agreements - all types of agreements] all designate that arbitration shall be conducted by a single arbitrator and that arbitration can be by telephone, video, on submission of papers or in-person hearing.  The arbitration company designated has inexpensive arbitrator fees and a streamline process for determining the dispute.  As a result, most of our arbitration take no more than one hour and usually get a hearing and determination within 60 days of when we commence the arbitration proceeding.  Confirming the award will take as long as your local court system takes.  If we handle your arbitration we will confirm the award if in New York or New Jersey.  In other states you will use your local attorney to confirm the award, and the arbitration rules provide that you are entitled to attorney fees to pay for the confirmation proceeding.  Keep in mind that the confirmation proceeding is not a trial on the merits of the case, because that has already been determined by the arbitrator; it's just to confirm so it takes much less time than waiting for a trial date. 
    Our experience with arbitration has been favorable, with outcomes we would expect had we gone to litigation in court.  The real difference is that we can get the collection process going within days of you sending it to our office, which gives us the opportunity to try and settle the dispute quickly, often by reinstatement of the account if it's a collection case, or a resolution of the dispute if another type of case.  If no settlement the arbitration hearing and determination typically takes less than 60 days from start to finish.  
    Arbitration has other features that should encourage you to include the provision.  Properly drafted, the arbitration clause prohibits class action participation against you.  It also levels the playing field.  Just this week I suggested changes in a Central Station Dealer Agreement [I was representing the Dealer] to include the arbitration clause.  The CS is on the East Coast and the Dealer is in the South.  The contract called for litigation in the central station's home state.  That forum provision alone could make it economically unfeasible for the Dealer to engage in any litigation, forcing it to agree to whatever the central station decided.  The arbitration clause would permit the dispute to be resolved by a single arbitrator over the phone, video or if significant enough dispute, in-person hearing.  The cost of determining the dispute would be manageable.  
    If you have the Kirschenbaum TM contracts then you can rely on us to handle your disputes with subscribers, employees and anyone else who has signed a contract with you.  If its a subscriber collection case contact our head paralegal Kathleen Lampert at KLampert@Kirschenbaumesq.com or 516 747 6700 x 319.  If it's any other kind of dispute contact our Contract Administrator Eileen Wagda at EWagda@Kirschenbaumesq.com or 516 747 6700 x 312 and Eileen will put you in touch with me or another attorney in the office expert in the area of dispute.
    We use the arbitration provision in matrimonial contracts, real estate contracts and commercial transaction in the alarm and other industries.  Just like contracts are not the same, neither are the arbitration companies, so be sure to use the Kirschenbaum TMcontracts and get us involved in all your transactions, business and personal.  
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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301
ken@kirschenbaumesq.com
516 747 6700
www.KirschenbaumEsq.com