Arbitration is an oft-used form of alternative dispute resolution. Two or more parties fail to resolve a disagreement, they may turn to arbitration. But is it better to litigate or arbitrate? The answer to this question depends on a number of factors. When it comes to arbitrating ERISA fiduciary claims, the situation becomes even more complex. Is arbitration the best solution? Are there any downsides to solving an ERISA fiduciary claim in this manner? In this article, we will explore the pros and cons of arbitrating ERISA fiduciary claims.
ERISA Fiduciary Claims
The Employment Retirement Income Security Act of 1974, as amended (“ERISA”) is a sweeping federal law pertaining to employee retirement and benefit plans. People who manage such plans are fiduciaries. ERISA regulations set forth standards of conduct for plan sponsors and administrators who act as fiduciaries.
In fact, ERISA fiduciary claims appear to be on the rise, with challenges to arbitrating such claims even reaching the United States Supreme Court.
Is Arbitrating ERISA Fiduciary Claims the Right Move?
There’s no doubt that arbitration offers many benefits over a trial, including:
- Arbitration costs less than going to court.
- Parties receive a decision more quickly than going through a protracted courtroom battle.
- Parties may have some control over the arbitrator, but no control over a judge and jury.
- Arbitration is less formal and more private than trial.
However, arbitration is not appropriate or acceptable in all situations.
Reasons Arbitrating ERISA Fiduciary Claims Might Not Work
Some of the ‘cons’ of arbitration include:
- The decision is final, legally binding, and usually impossible to appeal.
- The lack of publicity may favor one side over another;
- The informal procedures may include little evidence gathering.
ERISA Fiduciary Claims Need Immediate Attention
Whether arbitrating or not, any challenges related to ERISA fiduciary guidelines are not to be ignored. Consult with an experienced ERISA attorney to learn more about your options.