Mandatory arbitration is when the court or terms of a contractual agreement require the plaintiff and defendant in a legal case to determine liability for damages through an arbitration process before a civil lawsuit can be filed. Arbitration allows a neutral third-party to evaluate the presented evidence and determine the compensation. For the arbitration each party is allowed to present their evidence. If either party is unsatisfied by the arbitration award they may have the opportunity to file their lawsuit in court. Under most conditions, either party must prove that fraud was committed in the arbitration process to get a new trial. If a lawsuit is argued in court the award will be determined by a judge or jury.
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