Cost of the arbitration service provider in private arbitrations
In private arbitrations, if an arbitration service is involved, there will be a fee for the arbitration service to administer the arbitration. The cost of the arbitrator is in addition to the fee of the arbitration service.
Cost of of the arbitrator in private arbitrations
Dispute avoidance is almost always cheaper than dispute resolution, but, if you are here, you probably have a dispute to resolve.
Arbitrators, as a rule, are already successful lawyers or other professionals. They are selected by the disputants because they are respected for their knowledge, temperament, and dispute resolution skills. They provide valuable services. Typically arbitrators charge by the hour, both for hearing time and study time. Under some arbitration rules there may be a flat fee.
Rates, while negotiated, are similar to those charged by successful lawyers (or other professionals as the case may be) of similar skill and experience.
Some arbitration rules control what the arbitrator can charge. But more commonly, in private arbitrations, arbitrators charge what they agree with the parties, which depends on the experience of the arbitrator, the demand for that arbitrator's time, prices in the region, the subject matter of the arbitration, the amount in controversy, and so on. Prices may be based on hourly or daily rates. Prices may differ for hearing time and study time. Posted prices on the internet range up to $500 per hour. Common sense dictates that payment is typically made in advance. Advance payments will be held in a trust account and unused amounts returned.
The cost of the arbitrator - or arbitrators, when there is a three arbitrator panel - is usually far less than the cost of the lawyers or the amount in dispute. Often, the cost of arbitrators is awarded against the losing party in the arbitration. In these regards, arbitration is not different from litigation.
Frederic Cann Arbitrator rates for private (not court annexed) arbitrations
Cost of the arbitator in court annexed arbitration
- $250 per hour for hearings in Oregon and Washington and 'study' time - including conferences and motions ($1,600 per day maximum)
- $ negotiated for travel
- $ negotiated for activities outside hearing days or outside normal business hours (between 8:00 a.m. and 6:00 p.m.)
- $ negotiated for hearings outside of Oregon and Washington
- $ negotiated for evening arbitrations
- Cancellation fees negotiable
- Plus expenses
In some kinds of arbitrations, the arbitrator's fees, as well as the time for part and full payment, and the maximum amount chargeable for an arbitration, are set by law. For example, in Oregon, the fees for court annexed arbitration are set by the arbitration commission of each circuit court. The approved hourly rates range from $125 to $175 per hour and the maximums for a case in the tri-county area is $1,050, which is substantially less than what successful arbitrators charge in private arbitrations.
Court annexed arbitrators are allowed to charge more than the court authorized rates only where
- the parties have selected the arbitrator, and
- the arbitrator has agreed to serve outside the court's system of appointment from a list, and
- the parties have agreed to the additional charges.
I will conduct court annexed arbitrations at the fees set by the county arbitration commissions, with the following limitations:
- All hearings will be conducted in Multnomah County and there will be additional fees for hearings outside Multnomah County or I will decline the opportunity to serve regardless of how appointed
- I will conduct arbitrations with pro se / unrepresented litigants only:
- for Multnomah County cases, or
- when appointed by the court.
The only way to reduce the fees for the arbitrator in court annexed arbitration is to obtain a fee waiver. A fee waiver is obtained from the supervising Circuit Court, not from the arbitrator, and there are strict timelines for obtaining the fee waiver. Some arbitrators will not conduct arbitrations where there have been fee waivers. I will hear cases where one party has a fee waiver, but usually not whenboth parties have a fee waiver, all depending on the kind of case. Where there has been a fee waiver, I am aware of it, but it has no effect on my decision making. Sometimes, depending on the availability of funds, the State of Oregon Judicial Department may pay the the arbitrator the fees which the Circuit Court has waived.
In court annexed arbitration, payment in advance to the arbitrator is required by law. This is no different than litigation in court, where court costs (except when waived or deferred by the court) are required to be paid in advance.