Like Court, but with More Control
Disputes taken to court are settled by judges who, while experts in law, may or may not have subject matter expertise in the particular area of dispute. Arbitration allows the parties to choose the arbitrator, whether they be a specific person or someone with a required level of expertise, and agree in advance to be bound by their decision. Because both parties are working together to set mutually-acceptable terms, arbitration also has the potential for flexibility, in that both parties may wish to suspend the arbitration in favor of mediation or facilitated negotiation.
The Arbitration Process
Once an arbitrator has been agreed upon and documents have been shared, hearings begin. At the hearings, which can be formal or informal, both parties have the opportunity to present evidence, opening and closing statements, and cross-examine witnesses. The rules of evidence usually apply in arbitration, as opposed to other forms of dispute resolution, such as mediation, and the arbitrator(s) has the ability to dismiss or prioritize evidence as they see fit. The arbitrator then imposes a decision that is often legally binding and not appealable to the courts, and in rare cases where an appeal is heard, courts generally uphold the arbitrator’s ruling.
Confidentiality is Key
Because courts are public forums, information about your business and personal affairs becomes public knowledge available to others. Arbitration, on the other hand, is almost always conducted in private and only made public with the explicit consent of both parties. Arbitration awards are generally not a matter of public record.
Ideally Suited to Corporate Disputes
Being able to choose an arbitrator with industry-specific expertise is especially important in corporate disputes. In addition, arbitration is often preferred in disputes involving international transactions, as all parties may not be familiar with the rules and procedures of a foreign court system, which puts them at a disadvantage.
Arbitration is Faster and Costs Less Than Going to Court
Disputes that can be settled in court can often take many months or years. With arbitration, these same disputes can be settled in weeks and at a fraction of the cost of pursuing litigation.
For more information on when arbitration is recommended, our other Alternative Dispute Resolution services, or to contact us, please see the links below: