Arbitration

Arbitration often allows you to resolve disputes more quickly and cheaply than by going to court. Instead of judges or juries, arbitrators decide if wrongdoing occurred and how to correct or compensate you for it.

When the arbitration is over, the decisions of the arbitrators are final and not subject to appeal. If you are unhappy with the result, you cannot go to court to try again. The arbitrators' decisions can only be challenged under very limited circumstances—for example, if you can demonstrate that an arbitrator was biased. If you want to challenge an arbitrator's decision you must do so within three months or less in a "motion to vacate." You'll find more information about challenging an arbitrator's decision elsewhere in Fast Answers.

If you have a brokerage account, you probably signed an agreement that requires you to settle any disputes with your broker through arbitration rather than the courts.

Time is of the essence. To take advantage of your legal rights, you must take legal action promptly or you may lose the right to seek a remedy or recover funds. Time restrictions, called "statutes of limitations," vary from state to state. For example, federal securities laws generally require that you bring a court action within two years of the date that you should have reasonably discovered the wrongdoing, but in no case later than five years from the date the wrongdoing actually occurred. Arbitrators look to either a federal or state statute of limitations, depending on whether your claim is a violation of federal or state law. You generally cannot pursue an issue through arbitration if it is more than six years old.