Arbitration is a form of alternative dispute resolution (ADR) that allows parties to resolve legal disputes outside the courtroom. Instead of going before a judge, both sides present their case to a neutral third party—or a panel—known as an arbitrator.
The arbitrator then renders a decision, which may be legally binding or non-binding depending on the agreement.
In Charleston, South Carolina, arbitration is frequently used in business disagreements, employment conflicts, contract disputes, and even in some personal injury settlements. Because it is typically faster, more private, and less expensive than courtroom litigation, many individuals and businesses turn to arbitration as a practical solution.
1. How Does Arbitration Work in South Carolina?
Although the specifics of arbitration can vary based on the nature of the dispute and any pre-existing agreements, the general process follows these five steps:
Step 1: Agreement to Arbitrate
Arbitration may be:
- Mandatory, due to an arbitration clause in a contract
- Voluntary, agreed upon after a dispute arises
Common contracts that include arbitration clauses:
- Employment agreements
- Business contracts
- Consumer terms and conditions
- Insurance policies
If no prior agreement exists, both parties must agree to arbitration after the conflict arises.
Step 2: Selecting an Arbitrator
Parties typically agree on a neutral arbitrator, often a retired judge or experienced attorney. In some cases, a panel of arbitrators may be chosen.
Well-established organizations such as the American Arbitration Association (AAA) or JAMS can assist with:
- Selecting qualified arbitrators
- Applying standardized arbitration procedures
Step 3: Pre-Arbitration Preparation
Before the hearing, both parties may go through:
- Pre-hearing conferences to define the scope of arbitration
- Exchange of documents, evidence, and witness lists
- Limited discovery (much less extensive than in court)
Step 4: The Arbitration Hearing
This stage resembles a trial but is less formal. It usually takes place in a private setting, like a conference room, and includes:
- Opening statements
- Testimony and cross-examinations
- Presentation of documents and evidence
- Closing arguments
Step 5: Arbitrator’s Decision (Award)
After hearing the evidence, the arbitrator issues an award:
- Binding Arbitration: The decision is final and legally enforceable.
- Non-Binding Arbitration: The decision is advisory, and either party may choose to proceed to court.
In South Carolina, most arbitration agreements are binding, and courts will only overturn awards under extreme circumstances such as fraud or misconduct.
2. When Is Arbitration a Good Option?
Arbitration can be an excellent alternative to litigation when:
- You want to avoid a lengthy and expensive court process
- You value privacy and confidentiality
- You have an ongoing relationship with the opposing party and want a less adversarial process
- Your contract requires arbitration as the primary dispute resolution method
In Charleston and throughout South Carolina, arbitration is commonly used in:
- Employment law cases
- Business and commercial disputes
- Real estate and construction conflicts
- Healthcare and insurance-related disputes
3. What Are the Pros and Cons of Arbitration?
Advantages
- Faster resolution compared to court proceedings
Private hearings with no public record - Flexibility in procedures and scheduling
- Finality: In binding arbitration, decisions are not easily appealed
- Experienced arbitrators who often specialize in the relevant legal field
Disadvantages
- Limited appeal rights: You typically cannot challenge a binding award
- Potential costs: Arbitrator fees and attorney costs can add up
- Possible bias: Some argue that arbitration clauses favor larger entities
- Restricted discovery: You may not gather as much evidence as in litigation
4. Arbitration vs. Mediation: What’s the Difference?
Many people confuse arbitration with mediation, but they serve different purposes.
Factor | Arbitration | Mediation |
Decision-Maker | Arbitrator issues a final decision (award) | Mediator helps parties reach agreement |
Binding? | Usually binding | Only binding if both sides agree |
Formality | More formal – like a mini-trial | Informal, discussion-based |
Outcome | Decision enforced like a court judgment | Voluntary settlement (if successful) |
In South Carolina, courts may order mediation before allowing a case to proceed to trial. Arbitration, on the other hand, is often pre-agreed in a contract or voluntarily chosen instead of litigation.
5. Is Arbitration Legally Enforceable in South Carolina?
Yes. The South Carolina Uniform Arbitration Act allows arbitration awards to be enforced by the courts, just like any court judgment.
However, challenging an arbitration award is difficult and rarely successful. A court may only vacate or modify an award in cases of:
- Fraud, corruption, or misconduct by the arbitrator
- Bias or partiality
- Exceeding authority beyond the terms of the arbitration agreement
Because of the finality involved, it’s important to work with an experienced attorney before entering arbitration—especially in cases involving significant financial or legal consequences.
6. Frequently Asked Questions
➤ Is arbitration better than going to court?
It depends. Arbitration is faster and more private, but it limits your right to appeal and eliminates jury trials.
➤ Can I refuse arbitration if it’s in my contract?
Usually not. Courts generally uphold arbitration clauses unless they’re proven unfair or overly one-sided.
➤ Is arbitration public?
No. Arbitration proceedings are confidential and not part of the public record.
➤ How long does arbitration take in South Carolina?
Most cases resolve within a few months to a year, depending on complexity and scheduling.
Final Thoughts: Is Arbitration Right for You?
Arbitration offers a practical, efficient way to resolve disputes—especially when privacy, speed, and cost are key concerns. However, because the process is legally binding in most cases, you should approach it with the same seriousness as a court case.
At The Bill Connor Law Firm, we help clients throughout Charleston and South Carolina evaluate arbitration clauses, navigate dispute resolution, and protect their rights—before, during, and after arbitration.
Guided by his faith, shaped by military service, and recognized for legal excellence, Bill Connor—an AV® Preeminent™ Peer Review Rated attorney and retired U.S. Army Colonel—advocates for clients with clarity, conviction, and Christian values at the core.
Contact us today if you’re facing arbitration or reviewing a contract with an arbitration clause. We’ll make sure you understand your options—and help you choose the right path forward.
