Paralegal Advanced Competency Exam (PACE) Practice Exam

What is the role of an arbitrator in arbitration?

1. To represent one of the parties involved

2. To act as a legal counsel

3. To hear evidence and make a binding decision

4. To mediate between the parties

The correct answer is: To hear evidence and make a binding decision

The role of an arbitrator in arbitration is to hear the evidence presented by the parties involved and to make a binding decision based on that evidence. This process is a key component of arbitration, which is an alternative dispute resolution method designed to resolve conflicts outside of traditional court litigation. In arbitration, the arbitrator acts as an impartial third party whose primary function is to evaluate the arguments, documents, and testimonies from both sides effectively and deliver a resolution. Unlike mediation, where the mediator facilitates discussion and negotiation to help the parties reach a mutually acceptable settlement, the arbitrator's decision is final and legally binding. This means that the parties agree to abide by the arbitrator's ruling, similar to a judgment made by a court. The other roles mentioned, such as representing a party or acting as legal counsel, do not align with the impartiality required of an arbitrator. Additionally, while mediators help foster dialogue between disputing parties, an arbitrator's focus is exclusively on evidence and decision-making, making the role distinctly different.