How is a settlement determined in Arbitration? What method is used to place a value on the how much a 'suit' is worth?

There are many many many different factors. It depends on the specifics of the case.

Do they look at the expense of defending one's self? Do they look at what laws have been violated?

In reading Federal Statutes, it is states that when certain laws are violated, the offending party must make the party that was wronged 'whole' again. I am assuming that this means bringing the person back to the same financial state they were in prior to the offense. Ie... you have a contract, one party maliciously breaks the contract resulting in a loss to the other party. The party with the loss must retain legal counsel to resolve the issue.

At what point, if any, do the Arbitrators look at the expenses involved by the wronged party?