Arbitration is sometimes referred to as the opposite of litigation. A neutral third party or panel of third parties are hired to hear both ends of an argument and make a fair decision, based on each party's presentation. Arbitration is beneficial to both parties involved, because it is cheaper, faster, and offers more privacy.
The most noticeable benefit of arbitration over litigation is its cost and time effectiveness. Lawyers do not have to be hired to spend hours reviewing cases and making arguments in a courtroom. Also, the individual parties are able to work around their own schedules, instead of waiting for several appointments in an overbooked courtroom. The arbitration is also private, and therefore not open to the public or the media without the expressed permission of both parties.
The following are some common situations where opposing parties agree that arbitration would be preferable to litigation:
Likewise, there are many reasons why arbitration would not be the best solution to an argument. If the case is too complex to be sorted out in one meeting, or if one party would like to retain the right to appeal a decision, litigation would be more beneficial. Also, if more than two parties are involved, or if certain entities lack the ability to enter arbitration, this form of alternative dispute resolution may not be entirely feasible.
Though arbitration has many advantages, it is wise to consider all of the options when preparing to begin arbitration. Knowing the major differences between arbitration and litigation can be a valuable asset and a great time and money saver.