Arbitration is a process that uses anunbiased third-party to resolve disputes. It is often used in disputes related to contracts, but it can be effective in many circumstances in which parties need help resolving their differences.
What are the Benefits of Arbitration?
When disputes are settled by arbitration, it produces a legally binding decision determined by the arbitrator. This comes after the arbitrator has heard arguments from the parties involved. The process sets the resolution in the hands of the arbitrator, so parties are not in complete control of the outcome, but for many, arbitration is the preferred method of resolution. Benefits of arbitration include:
Less formality: Arbitration is a less formal process than litigation. This is not to say it is casual and some rules must be followed. However, there are fewer restrictions and fewer requirement than there would be if an issue were resolved in the courtroom
Less expense: In most cases, arbitration costs less than litigation. In part, this is due to the reduced level of formality. There is less required of the parties involved and with fewer requirements, the expense does not add up as quickly.
Less time-consuming: Using arbitration to resolve a dispute almost always means a resolution will be reached faster than it would have been had litigation been used to resolve the same dispute. Arbitration and other forms of alternative dispute resolution are just more efficient than litigation and using the court system to resolve disagreements.
How Does Arbitration Work?
In arbitration, disputing parties state their case to an arbitrator who is ultimately tasked with rendering a decision. Parties might have the ability to determine in advance whether or not the arbitrator’s decision will be legally binding. They might also be able to decide if attorney representation will be part of the process or not.
The arbitrator bases his or her opinion on testimony and evidence presented by both parties involved in the dispute.
In some circumstances, the decision to determine is made long before the dispute arises. There are many contracts in existence today that feature arbitration clauses that involve parties to resolve their dispute via arbitration.
Arbitration is less flexible than some other forms of alternative dispute resolution because the arbitrator makes the final willpower, but this does not mean that disputing parties lose all control over the issue. Because of the less formal environment, many people feel their arguments are better heard than they would be in a courtroom proceeding.
For arbitration to be a beneficial option for resolving disputes, it is important to work with an arbitrator who is experienced in the process and understands the benefits of using alternative forms of dispute resolution. When the goal is a productive and effective outcome – as opposed to dragging out a dispute and running up a large legal bill – an arbitrator can help parties move forward and keep the process on track toward resolution. Experienced arbitrators know how to get to an efficient resolution. If this sounds important to you, Ann O’Malley Shake can help.