Arbitration is essentially a paid private trial or a method of resolving disputes without having to go to court. Instead of going to court, the parties will have their disagreement resolved by a neutral third-party arbitrator. In contrast to a court bench or jury trial, the presentation may include entirely papers, however, both parties will almost always have attorneys present to make oral arguments. However, before opting to resolve your disagreement through arbitration, consider the following advantages and disadvantages.
- Faster resolution and schedule thanks to efficiency and adaptability
In most cases, the issue will be fixed much sooner. A court trial date might take years to get, but an arbitration date is usually only a few months away. Trials must also be scheduled within court schedules, which are frequently backlogged due to the hundreds, if not thousands, of ongoing cases. Arbitration hearings, on the other hand, can be scheduled according to the parties and the arbitrator’s availability.
- Simplified evidence and process rules make things easier
Litigation almost always necessitates the filing of papers and motions, as well as a presence at court proceedings such as motion hearings. The standard rules of evidence may not be properly followed in arbitration sessions, making it considerably easier to admit the evidence. In arbitration, the time-consuming and expensive process of taking and responding to interrogatories, depositions, and demands for the production of documents, known as discovery, might be greatly reduced. Instead, most concerns, such as who will be summoned as a witness and what paperwork must be filed, are addressed by simple phone calls with the arbitrator.
- Keep it out of sight of the general population
Unlike a trial, arbitration leads to a private conclusion, allowing the material raised in the dispute and its resolution to remain secret. Well-known public personalities or customers in commercial disputes may find this appealing because all evidence, remarks, and arguments will be kept fully secret. Even if particular data is not published, there is a danger that the public will have access to potentially sensitive corporate information if the case goes to court.
- It might be more expensive
Arbitration can be more expensive than judicial procedures in a variety of conditions. Quality arbitrators may collect exorbitant costs, which would be unlawful in court. If the final judgment or award in a non-binding arbitration is not “binding,” the parties are free to take their dispute to court, resulting in the expense of litigation being added to the cost of the prior arbitration. If the arbitrator rules in favour of the employer, the employer is responsible for paying the arbitrator’s fees in full. Arbitrator costs in employment law cases may be expensive, therefore this might be prohibitively expensive.
- Unpredictability: Surprising outcomes
As previously noted, arbitration does not always follow the same formal norms of procedure and evidence as a court trial. Rules of evidence may prevent some evidence from being considered by a judge or jury, but this restriction does not apply to arbitrators. As a result, an arbitrator’s judgment may be based on facts that would not be examined by a judge or jury during a trial, thereby harming your case. On the other hand, if documents contain specific information from a witness, there is no opportunity to cross-examine that witness.
An arbitrator may make rulings that would be undesirable in court, or he or she may push for unexpected solutions. This might be a benefit or a drawback, so consider how it might affect your intended goal. Visit more information about Institutional Arbitration from AIAC.