The Pros and Cons of Going Through Arbitration Instead of Litigation

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Using an arbitration service has become a common alternative dispute resolution for bankruptcy issues, employment discrimination cases, class actions, and even for mock trials that help you’re lawyers develop an ironclad case.

Choosing to use an arbitration service instead of going to court can be very beneficial for all parties involved. However, because it is an enforceable process that does not allow for appeals, you should make sure that it is the right route for your issue before agreeing to arbitration services instead of the traditional route. Knowing the pros and cons of arbitration is the best way to understand if the process suits your needs.

Benefits of Using an Arbitration Service
  • Generally less expensive than traditional litigation. Going through the court process is often a very time-consuming and drawn out process. Since most lawyers and legal experts work on an hourly basis, the legal bills add up fast. On the other hand, if you go through arbitration, the matter can be resolved at the convenience of the parties involved. Hiring a lawyer and an arbitrator is not going to be cheap, but generally you’ll spend far less then you would have spent if you went through a court proceeding.

  • Timeliness. According to studies conducted by the Federal Mediation and Conciliation Services, the average arbitration case takes approximately one year and three months to resolve. The exact types of cases that went the traditional litigation route took a minimum of 18 months and is much is three years to reach a decision on.

  • A more straightforward process. Most legal resources in litigation revolve around complicated procedures, such as rules of evidence, that don’t really have any bearing on your legal issue to begin with. Also, many of the processes that you have to go through with traditional litigation, such as interrogation, creating depositions, and requests for documentation, are used by lawyers as deny and delay tactics to force the plaintiff into a point of desperation so that they settle for less than they are owed. On the other hand, arbitration takes a straightforward approach that allows the facts of the case determine the outcome.
Drawbacks of Using Arbitration Services
  • Inability to appeal. If the arbitrator’s final decision is not in your favor, there is little that you can do about it. For this reason, it is essential to agree on an arbitrator that you trust.

  • Lack of objectivity. Many major companies find themselves in arbitration on a regular basis– especially if they include an arbitration clause in the contracts that they work with. When this is the case, the arbitrators tend to become very familiar with the companies to use them often, which might create a lack objectivity in their decision.

  • No transparency. Arbitration proceedings are generally held privately, and often with both parties signing nondisclosure agreements. As such, there is very little transparency when an arbitrator regularly makes decisions unfairly.
Have you ever gone through arbitration? What convinced you to choose an arbitrator over the traditional court process? We want to hear about your experience in the comment section below.