Even though it sounds complicated, arbitration was originally intended in part to provide a more simple and cost effective way of resolving disputes outside of court. In reality, arbitration can be quite complicated and also costly. FindLaw's Arbitration Basics section contains in-depth articles and related resources detailing just what arbitration is, how it works, when you can use it, and how it compares to mediation and other types of alternative dispute resolution (ADR). Also included is an article detailing some of the most important advantages and disadvantages of using arbitration to resolve an issue when compared to litigation.
What is Arbitration?
Arbitration is a legal mechanism for alternative dispute resolution (ADR) that allows parties to avoid the expense and risk of a lawsuit by attempting to reach an agreement outside of court. Arbitration is always voluntary, though the agreement to submit one's self to arbitration may take place long in advance of the issue. Many written contracts, for example, include a clause that requires the parties to meet for arbitration rather than go to court if a disagreement arises.
Arbitration can take a number of different forms, though generally speaking it involves one party delivering the other a notice outlining their dispute and expressing the intention to seek arbitration. In most jurisdictions there is time given for a responses, followed by a selection of arbitrators and a hearing. If the arbitration takes place as the result of a contract the rules, timeline, and venue may all be predetermined by the agreement.
Arbitration Pros and Cons
Arbitration is an interesting alternative to litigation. Depending on the circumstances it may be helpful or detrimental to pursue arbitration. However, there are some common defenses and complaints relating to arbitration that can help you determine whether arbitration is the right way to resolve your problems.
Arbitration benefits include:
Arbitration drawbacks include: