What is the difference between direct and indirect arbitration?
In Texas, the two main types of arbitration are direct and indirect arbitration. Direct arbitration is a process where the parties in dispute agree to have a neutral third party, such as a lawyer or an arbitrator, resolve the dispute. The parties will present their arguments to the third party directly, and the arbitrator will render a decision. Indirect arbitration is a process where the arbitrator does not hear the parties’ arguments directly. Instead, the parties submit evidenced documents and briefs which will then be considered by the arbitrator. The arbitrator then makes a decision based on the information submitted and does not conduct a hearing. The main difference between direct and indirect arbitration is that in direct arbitration, the parties are able to present their arguments directly to the arbitrator, while in indirect arbitration, the parties must present their arguments through documents and briefs. Additionally, an arbitration hearing is conducted in direct arbitration, while in indirect arbitration, no hearing takes place and the arbitrator bases their decision solely on the documents and briefs submitted by the parties. Both methods have their own pros and cons, so parties to a dispute must decide which type of arbitration is best suited to their needs.
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