prearbitration

Prearbitration refers to the set of procedures and activities that occur before an arbitration panel is convened to resolve a dispute. It encompasses negotiations, mediation, or other informal processes structured by contract, rule, or practice that aim to resolve or refine the dispute prior to formal arbitration.

It serves to reduce cost and time, preserve business relationships, and clarify the issues in dispute. Common elements include a mandatory or voluntary prearbitration mediation, a prehearing conference with the arbitrator, exchange of claims and defenses, document production, and set timelines for potential settlement or narrowing of issues.

Many contracts include a prearbitration clause or a pre-arbitration step required by arbitration rules (for example under certain institutional rules). Compliance may influence cost allocation and procedural ordering, and an arbitrator may be empowered to manage or enforce prearbitration processes, including setting schedules or imposing sanctions for non-compliance in some jurisdictions.

Advantages include cost savings, faster resolution, and greater control over the process. Criticisms include potential delays if negotiations stall, unequal bargaining power, or unnecessary mediation that may not yield a settlement. Proper drafting is important to ensure the prearbitration step is meaningful without creating coercive or unfair procedures.

Related concepts include mediation, arbitration, and pre-arbitration clauses.