What is the difference between the Federal Arbitration Act and state arbitration law?
The Federal Arbitration Act (FAA) is a law enacted by the federal government in 1925 which allows for disputes to be settled out of court using arbitration instead of traditional litigation. The FAA is applicable nationwide, meaning that it applies to all states. On the other hand, state arbitration law is state-specific, meaning that each state can develop its own laws about arbitration. In Virginia, state arbitration law is located in the Virginia Code and is known as the Virginia Arbitration Act (VAA). The VAA grants parties in a dispute the ability to pursue an arbitration process with more control than the FAA. For example, the VAA provides parties with the ability to choose the rules governing the arbitration process, while the FAA requires parties to use the rules provided by the court. The primary difference between the FAA and the VAA is that the FAA applies to all states while the VAA applies only to Virginia. The FAA provides parties with the ability to have their dispute heard out of court, while the VAA goes further by allowing parties to use the arbitration process as they see fit. This allows Virginia residents to have more control over the outcome of their dispute since they can choose their own arbitration rules.
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