| Q. | What is court-ordered arbitration? |
| A. | An arbitration hearing* is an informal legal proceeding held before a neutral court official called an arbitrator. At the hearing, each side of a dispute will have a chance to tell his or her story to the arbitrator. Each side can present witnesses and documents. After the evidence has been presented, the arbitrator will, like a judge, make a decision in the case.
Since you have been ordered to arbitration by the court, you must attend the hearing, participate in good faith and pay your share of the $100 fee. Failure to attend an arbitration proceeding may result in the court ordering sanctions against you.
Arbitration is intended to be a simple, inexpensive, and quick way to resolve disputes. To be eligible for court-ordered arbitration, a dispute must have been filed as a case in the North Carolina court system. Also the party who is being sued typically has responded to the plaintiff’s complaint by filing what is known as an answer. If your case is assigned to arbitration, there are certain procedures you must follow. This guide is designed to explain those procedures and to help you prepare for arbitration. The information contained in this guide is based on the Rules for Court-Ordered Arbitration adopted by the Supreme Court of North Carolina.
*Words in bold are defined in the glossary of terms appearing on the menu bar for Court Ordered Arbitration.
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| Q. | Do I need an attorney? |
| A. | Individuals can choose to use an attorney or represent themselves at arbitration. Only corporations have to be represented by an attorney.
If you represent yourself, all notices will be sent to you at the address listed on your complaint or answer. You must notify the Clerk of Superior Court if your mailing address changes. If you are represented by an attorney, notices about your case will be sent to your attorney. |
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| Q. | Is arbitration available in every county in North Carolina? |
| A. | Arbitration is not yet available in every county. The Clerk of Superior Court can tell you whether arbitration is available in the county where your case is pending. You may also check the AOC website at www.nccourts.org. |
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| Q. | Which cases get assigned to arbitration? |
| A. | In those counties with the program, arbitration is required in every civil case involving a claim for $15,000 or less, with a few exceptions discussed later. Parties can agree to submit other cases to arbitration with the approval of the judge. (See the “Stipulation and Order” located under Arbitration Forms.) Arbitration is also required after a magistrate’s order in small claims is appealed, if the case involves a claim for money. In those cases, you will be scheduled for a hearing by an arbitrator even if your case has already been heard by a magistrate. In a small claims case, the court decides whether the case is subject to arbitration at the time the magistrate’s order is appealed.
In all other cases, the court decides whether the case is eligible for arbitration when the complaint is first filed. Once an answer is filed the court will send to you or your attorney a notice called, “Notice of Case Selection for Arbitration,” which tells you that your case has been assigned to arbitration. The form is available under Arbitration Forms.
The following types of cases are not eligible for arbitration: class actions, cases involving a substantial claim for injunctive or declaratory relief, family law matters, real estate title actions, wills or estate cases, summary ejectments or collection on account cases (where that is the sole claim). |
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| Q. | Am I required to participate in the arbitration hearing? |
| A. | If your case is assigned to arbitration, you must participate unless you get the court to agree that the case does not belong in arbitration. If you believe your case should not go to arbitration, you must file a motion with the court asking the court to exempt or remove the case from arbitration. To have your case exempted, your motion must show the court that the amount of the claim is larger than $15,000; that the case is of a type that is not eligible for arbitration; or that there is some other compelling reason to exempt your case. You must file the original motion with the Clerk of Superior Court and you must serve copies of the motion on all other parties to the case at least ten days before the date set for the arbitration hearing. (See Questions 6 below). You are responsible for calendaring the motion for hearing before a judge. You must contact the office of the Chief District Court Judge or the Trial Court Administrator to determine how this needs to be completed. |
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| Q. | How do I file and serve motions and other documents? |
| A. | To file a motion or other document with the court, give or mail the original to the Clerk of Superior Court. The Clerk must receive the motion or document before any deadline for filing that particular document or motion has expired. You must also serve copies on all parties in the case, by either hand delivering or mailing copies of the document to each party or to his or her attorney. |
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| Q. | Who can be an arbitrator? |
| A. | The court in your area keeps a list of qualified arbitrators. Each arbitrator on the list is an attorney who must have been admitted to practice law for at least five years. The arbitrator must have been a member of the Bar of the State of North Carolina for at least the last two years of the five-year period. Each arbitrator on the list has also completed a training program and been approved to serve by the Chief District Court Judge in the county where the case is filed. Individuals who are not on the list and who have not completed the arbitrator training may also serve as arbitrators if all of the following conditions are met: (1) all the parties to the case agree to the selection; (2) the person is an attorney and has been licensed to practice law for five years, having been admitted in North Carolina for at least the last two years of the five year period; and (3) the selection is approved by the court. |
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| Q. | Who pays for the arbitrator? |
| A. | There is a $100 fee to reimburse the state to cover the cost of providing the arbitrator. You are responsible for paying your share of the $100 fee, unless you have been granted leave to sue or appeal as an indigent. You will be notified of this fee in the "Notice of Arbitration Hearing". You must pay this fee promptly upon completion of the arbitration hearing regardless of the outcome of the case. You will be given a form, "Arbitration-Assessment of Arbitration Fee" at the end of the hearing. It will indicate the amount you owe. You should take this form to the cashier in the Office of the Clerk of Superior Court to pay your share. The cashier will accept cash, a cashier's check or a money order. If you do not pay promptly after the hearing, the amount assessed will be docketed as a judgment in favor of the State when the award is filed. If you do not prevail at the hearing, the arbitrator may enter an award that you pay the opposing party for any court costs that he or she had to pay, such as filing fees and his or her share of the $100 fee. |
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| Q. | How is the arbitrator selected for my case? |
| A. | You and your opponent may agree upon an arbitrator. If you cannot agree, the court will appoint an arbitrator to your case from a list of qualified arbitrators. You have twenty days from the date of the filing of the last responsive pleading in your case to agree on an arbitrator and to notify the court of your selection. If your case is an appeal of a magistrate’s decision, you have twenty days from the docketing of the appeal to agree on an arbitrator and to notify the court of your selection.
If you and your opponent wish to choose your own arbitrator rather than have one appointed by the court, you may contact the arbitration coordinator for your court and request a copy of the court’s list of qualified arbitrators. You and your opponent may choose an arbitrator from the court’s list or you may select an arbitrator who is not on the list. If the arbitrator you choose is not on the list, he or she must have been admitted to practice law for at least the last five years, the last two of which must have been in North Carolina, must agree to serve as your arbitrator, and must be approved by the court to act as your arbitrator.
If you and your opponent agree on an arbitrator who is on the list, you must inform the court of your choice by filing a stipulation with the Clerk of Superior Court. The stipulation must be signed by all parties and must list the arbitrator by name and address.
If you and your opponent select an arbitrator who is not on the list, your stipulation must be accompanied by the arbitrator’s written consent to hear the case. The "Stipulation and Order" form is available under Arbitration Forms.
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| Q. | When is the arbitration hearing held? |
| A. | You or your attorney will receive a “Notice of Arbitration Hearing” which tells you the date, time, and location of the hearing. The arbitration hearing must be held on the date specified in the notice or, if rescheduled, within sixty days of the date of the last responsive pleading. When a magistrate’s order in a small claims case is being appealed, the arbitration hearing is scheduled for no later than sixty days after the filing of the appeal.
If you and your opponent have not already selected an arbitrator, the “Notice of Arbitration Hearing” will also designate your arbitrator.
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| Q. | Can the arbitration hearing be rescheduled? |
| A. | Requests to reschedule the hearing must be made to the Arbitration Coordinator. It is very important that you attend your arbitration hearing on the date it is scheduled. Arbitrators are sometimes scheduled weeks in advance and requests to change the date or time of the hearing often are a hardship and can affect their availability. Moreover, requests to reschedule can also be difficult for court personnel who must reschedule hearing rooms or make other accommodations for parties who cannot participate at the appointed time. You should make every effort to attend on the date your hearing is scheduled and to arrive on time for your hearing. It is often difficult to find parking near courthouses, so give yourself some extra time to find parking and locate the room for your hearing.
In the event an emergency situation arises and you cannot attend your hearing, call the Arbitration Coordinator immediately and explain your circumstances. The Coordinator may be able to assist you. However, the Coordinator does have an obligation to the court to avoid delays. The arbitration hearing must be held within the timeframe mentioned above. Emergencies will be handled by the Coordinator, pursuant to any relevant local guidelines and policies.
Unless you file a motion with the court and the court decides that there are strong and compelling reasons to delay the arbitration hearing, the hearing may not be rescheduled beyond the sixty-day period. When you file a motion, you must serve copies of the motion on all other parties in the case.
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| Q. | What happens if I do not attend the arbitration hearing? |
| A. | If you do not attend the arbitration hearing and do not arrange for it to be rescheduled, the hearing may be held without you. The arbitrator, without benefit of having heard your side, may decide in favor of your opponent. The court may also order sanctions against you, which could include a fine for failing to participate in the arbitration hearing.
If you do not attend the arbitration hearing and a decision is made by the arbitrator in favor of your opponent, you can request that another arbitration hearing be held. To get a rehearing, you have to show that your failure to appear at the original hearing was for a good reason and due to factors beyond your control. Please note that rehearings are not granted lightly, so you should attend the original arbitration hearing.
To request a rehearing, you must make a motion to the court. The motion must be filed with the Clerk of Superior Court and served on the other parties no later than thirty days after the date the arbitrator’s award is served on the parties.
If the court denies your request for a rehearing, you have the right to request a trial de novo, which is explained in Question 20 below. You must file your request for trial de novo with the Clerk of Superior Court and serve copies on the other parties within 10 days after the award is filed. Although you can obtain a trial de novo through this procedure, you may still be subject to sanctions, including monetary fines, for failing to participate in the arbitration hearing. In order to request a trial de novo you must pay a $100 fee. Please note that when a trial de novo has been filed and a motion for rehearing has not been filed a new timeframe applies. (See Question 20 below).
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| Q. | Where is the arbitration hearing held?
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| A. | The arbitration hearing is held in a courtroom or a public meeting room in the county where the case is filed. The “Notice of Arbitration Hearing” will give you the exact address and room number. The hearing is open to the public. |
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| Q. | May I talk with the Arbitrator before the arbitration hearing? |
| A. | You may not speak with the arbitrator except during the arbitration hearing. If you have questions about the arbitration process, you should call the Arbitration Coordinator. The Coordinator can only respond to procedural questions, however, and cannot give legal advice or discuss the facts of your case with you. Only the arbitrator can consider the facts and legal issues involved in your case and then only during the arbitration hearing itself. |
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| Q. | How should I prepare for the arbitration hearing? |
| A. | Gathering materials and notifying witnesses
You should begin preparing for the arbitration hearing when you receive the first notice from the court telling you that your case is subject to arbitration. You should gather all the information you have to support your case. Contracts, receipts, cancelled checks and photographs are a few examples of the kinds of evidence that you may want to present at the hearing. You may also want to have witnesses testify for you at the hearing. You are responsible for telling your witnesses the date and time of the arbitration. In order to ensure their willing participation, do not wait until the last minute to tell the witnesses about the date and time of the hearing and the need for them to be present. If a witness is unable to attend, you may submit a written statement from that person if the other parties agree to the written submission and forfeit their opportunity to question the witness.
If you want a witness to attend, but the witness refuses, you have the right to obtain a witness subpoena. A witness subpoena is a court order requiring a person to attend the arbitration hearing and to testify. You also have the right to obtain a document subpoena if you need documents that are in the possession of another person and that person refuses to make them available for the hearing. A document subpoena is a court order requiring a person in possession of documents to make them available for the hearing. Witness and document subpoenas can be obtained from the Clerk of Superior Court.
In preparing your case, you should keep in mind that an arbitration hearing is limited by rule to a total of one hour. Therefore, your total presentation should not last any longer than thirty minutes.
Providing information to opponents before the hearing
At least ten days before the date of the hearing, you must provide to all parties in the case: (1) a list of your witnesses; (2) copies of any documents and other exhibits you intend to use as evidence at the hearing, including any written statements from witnesses (do not send originals); and (3) a short written statement describing the issues in the case and why you believe the arbitrator should rule in your favor. Similarly, your opponent must provide you with a list of witnesses, copies of documents he or she intends to use as evidence, and a short written statement about the case. If you do not provide your opponent with this information, the hearing will proceed, but the arbitrator may not allow you to present the information during the hearing.
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| Q. | What should I do if I settle out of court? |
| A. | If you and your opponent are able to work things out before the arbitration hearing, you must notify the Arbitration Coordinator immediately so that the hearing may be cancelled. The person who filed the lawsuit must also sign and file a Voluntary Dismissal form with the court. Such a form can be obtained from the Clerk of Superior Court. The Voluntary Dismissal form should be completed prior to the arbitration hearing, otherwise the hearing will continue as previously scheduled. |
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| Q. | What will happen at the arbitration hearing? |
| A. | At the beginning of the arbitration hearing, the arbitrator will explain the ground rules. The arbitrator may also ask you to give a brief opening summary of your case. Since the hearing only lasts one hour, you should limit your opening remarks to the important points you plan to prove.
Each side will then be given a chance to present his or her witnesses, documents and other evidence. Each will also be given an opportunity to question the other side’s witnesses. The arbitrator may ask questions to help clarify each side’s story.
After all of the evidence is presented, the arbitrator may ask you to give a short closing summary of your position.
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| Q. | When does the arbitrator make his or her decision? |
| A. | The arbitrator may announce his or her decision, called an award, at the end of the arbitration hearing. Sometimes, the arbitrator will wait and issue the award after he or she has had more time to think about the case. However, the arbitrator must issue a written award and file it with the court no later than three days after the end of the arbitration hearing. You or your attorney will be sent a copy of the award. The award may or may not explain the arbitrator’s reasoning. |
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| Q. | May I settle out of court after I get the award? |
| A. | One purpose of arbitration is to give the parties a realistic idea of the value of their case. You and your opponent may wish to talk about settling the case after you see the arbitration award. In fact, the thirty-day period from the date of the award to the date the award is entered as a court judgment is intended to give you and your opponent time to reconsider settlement.
If you reach a settlement and dismiss the lawsuit within thirty days after the date of the arbitration award, the arbitration judgment will not be entered in the court’s record. To dismiss the lawsuit, the party who filed the lawsuit must sign and file a Voluntary Dismissal form with the court. It is important to file this form. Your credit may be adversely affected if a judgment for money is entered against you and the court is not notified that you and your opponent have settled.
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| Q. | If I do not like the award, do I have the right to a trial? |
| A. | If you are dissatisfied with the arbitrator’s award and are unable to settle the dispute, you may request a trial de novo. The term trial de novo means trying a dispute as if it has not been heard before and as if no decision was previously made. During the trial de novo, a judge or jury will hear and decide your case. You have the right to a trial de novo after arbitration even if your case had previously been heard by a magistrate. You have the right to a trial de novo whether you are the plaintiff or defendant.
If a jury trial was properly requested when your case was originally filed, the case will be heard by a jury. If a jury was not requested, your case will be heard by a judge. Whether the trial is held before a judge or jury, the arbitrator’s decision may not be relied upon by either side or even mentioned at the trial.
To obtain a trial de novo, you must file a written request with the Clerk of Superior Court no later then thirty days after the arbitrator has filed his or her award with the court. You must serve copies of your request on all parties in the case within the same thirty-day period. Forms for requesting a trial de novo are available from the Clerk. A sample form is available under Arbitration Forms.
When you request a trial de novo, you must pay an additional filing fee of $100.00 to the Clerk of Superior Court. If at trial you receive a more favorable decision from the judge or jury than you got from the arbitrator, you may file a motion with the court requesting that this additional filing fee be returned to you.
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| Q. | What happens if no one requests a trial de novo? |
| A. | If you and your opponent do not settle and dismiss the case within thirty days after the arbitrator's award is filed and no one requests a trial de novo during that same period, the award will become the judgment of the court. When a judgment is issued in these circumstances, there can be no trial de novo. Therefore, if you are dissatisfied with the arbitrator's award, you must file a request for a trial de novo within the thirty-day period. |
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| Q. | As a plaintiff, how do I collect a judgment in my favor? |
| A. | When an arbitration award becomes a court judgment, it can be enforced in the same manner as any other money judgment. If you win a judgment, it is valid for ten years. Before the end of that time, you may ask the court to extend the judgment for an additional ten years. The judgment becomes a lien against any land owned by the person against whom the judgment was awarded located within the county or counties where the judgment is docketed. This lien also extends to any land the defendant acquires in that same county(ies) for a ten-year period after the judgment is docketed. This means the defendant cannot sell that land without first paying your judgment. If the defendant pays you directly, you must go to the Clerk’s office and tell the Clerk that you have been paid, so that the lien on the defendant’s land can be removed.
Even though you may obtain a judgment, you may not, in fact, be able to collect it. If the defendant does not pay you, you may ask the court to use a process called execution, to try to collect the judgment. An execution is an order to the sheriff to seize and sell land and personal property owned by the defendant to satisfy the judgment. If you pay the required fee, you may ask the Clerk for an execution as often as you wish during the period the judgment is in effect.
The North Carolina Constitution provides that a defendant has the right to keep some of his or her land and personal property from being taken to satisfy a judgment. The properties kept are called “exemptions”. Therefore, after the judgment is entered, you must get two forms from the Clerk of Superior Court: (1) a “Notice of Rights”, and (2) a “Motion to Claim Exempt Property”. You must serve these on the defendant. The back of the “Notice of Rights” tells you how to serve the forms. If you have not heard anything from the defendant within twenty days, or if the defendant claims exemptions and you do not disagree with them, you may go to the Clerk and have an execution issued. If you disagree with the exemptions claimed, you may object and have a district court judge determine which property is exempt from execution.
You will have to pay a fee to the court to issue the execution and a fee to the sheriff to carry it out. Those costs will be added to the judgment to be paid by the defendant. If you know of any property that belongs to the defendant, you should give the sheriff a description and indicate where it may be found. The sheriff will sell any nonexempt property that can be found and turn the proceeds over to the court. The court will then give you the money collected. |
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| Q. | As a defendant, what rights do I have if a judgment is entered against me? |
| A. | If a judgment is entered against you stating that you owe money to a party and you want to pay the amount owed, it is safer to pay the money to the Clerk of Superior Court rather than directly to that party. If you do pay the party directly, make sure he or she notifies the Clerk so the judgment will not continue to be listed against you. If you cannot or do not pay the judgment, the plaintiff may have two forms served on you: (1) a “Notice of Rights”, and (2) a “Motion to Claim Exempt Property”. The notices will tell you that you must claim your exemptions or they will be waived. Exemptions are properties the law allows you to keep and which cannot be taken from you to pay off a judgment against you. If you fail to claim exemptions, the sheriff will be able to seize and sell any land or personal property that is not exempt. The “Motion to Claim Exempt Property” is the form on which you claim your exemptions. It tells you how much property you may exempt.
A judgment is valid for ten years and may be extended another ten years. It becomes a lien on any land you own at the time the judgment is entered or any land you buy or acquire in the next ten years. You cannot sell this land without first paying the judgment against you. |
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| Q. | Whom should I contact if I have other questions? |
| A. | If you have other questions about the arbitration process, you can contact your court’s Arbitration Coordinator. The Coordinator can respond to your questions about procedural matters, such as scheduling. If you had difficulty understanding this information, or if you have questions about the facts in your case and how the law will apply to those facts, you should make an appointment to consult with an attorney. While arbitration is designed with you, the litigant, in mind, you are proceeding with a legal matter and may wish to seek legal advice. The coordinator, judge’s staff, or clerks cannot answer specific questions about your case or matters of law. |
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