Non-binding arbitration, which is mandatory in certain civil cases in New Jersey’s federal and state courts, is far from non-binding in practice and not necessarily more efficient or economical than traditional litigation. Unlike contractually agreed-to binding arbitration, non-binding arbitration exposes the parties to additional costs, and may cause additional delay in the final adjudication of the case. The non-binding arbitration process can result in serious consequences, including the dismissal of a case or an adverse monetary judgment. A case may be terminated without the possibility of appeal and without ever being presented to a judge or jury.
On the other hand, an unsatisfied party may demand a trial de novo, rendering the expensive, time-consuming, non-binding arbitration proceedings a nullity. Because of these potential pitfalls, because non-binding arbitration is appropriate for some, but not all, civil cases, and because parties may opt out under certain circumstances, attorneys who have the choice should carefully consider whether participating in non-binding arbitration will further their client’s interests.
