ShmoopTube

Where Monty Python meets your 10th grade teacher.

Search Thousands of Shmoop Videos

Finance: What is Arbitration? 6 Views

Share It!

Description:

What is Arbitration? Arbitration is like court for the financial world. It is used to settle disputes between investors and their brokers. An investor can file a claim that leads arbitration, much like a lawsuit would lead to a court hearing.

Language:

English Language

Subjects:

Transcript

00:00
finance a la shmoop what is arbitration? was it Shakespeare who mused about [Shakespeare on stage discussing arbitration]
00:08
killing all the lawyers, wasn't that Henry the sixth or something mmm well if he
00:12
done so well that'd make arbitration not necessary...So first what is arbitration?
00:17
well basically it's the adjudication of a case outside of the formal normal
00:22
court system which is massively clogged in the United States like it needs a [Man unclogging toilet]

00:28
million gallon enema kind of clogged... The cost of fully adjudicating cases has
00:32
become astronomically expensive and time-consuming and filled with silly [Contract loopholes highlighted]
00:37
loopholes that make getting to a real just conclusion painful if not
00:42
impossible so it has become common practice for parties entering a
00:45
partnership or a contract in whatever form to agree to arbitration if a big
00:50
fat hairy conflict arises down the road you know...In arbitration both sides agree [A hairy monster appears in the woods]
00:55
to hiring a separate judge usually a retired judge from the normal court
00:59
system.. In arbitration
01:03
everyone simply relies on the arbitrating judge to be fair lots of [Judge stamped fair]
01:09
silly loopholes go away and "justice" in whatever form is
01:14
arrived at well hopefully faster and if that doesn't work well you can always do [Shakespear carrying a lawyer on a ship and throws him overboard]
01:18
things to Shakespeare way...
Full Transcript