Most contracts include an agreement of both parties to the arbitration process. However, everyone should have a basic understanding of the potential pros and cons associated with arbitrating a dispute instead of litigating it in court. And parties sometimes agree to keep the proceedings and terms of the final resolution confidential. PROs and CONs of Arbitration vis-a-vis Litigation: An Analysis. This neutral third-party has the ultimate decision-making authority in the matter. There are pros and cons to arbitration, as traditional rules of law don't necessarily apply to all cases. 2. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply. Cost: Surprisingly, the cost factor can also appear on this list as a "con" because arbitration does not always reduce the costs of resolving a legal problem. Arbitration awards can be high, but they tend to be more closely rooted in reality. If you win, the other side’s opportunity to appeal is very limited. Lack of transparency. Of all the construction contracts for which I’ve been Project Manager, none have ever gone on to Dispute, either in the Law Courts or to Arbitration. Being aware of the possible drawbacks of arbitration will help you make an informed decision about whether to enter or remain in a consumer transaction that mandates it — or whether to choose it as a resolution technique if a dispute arises. Confidentiality . Some organizations that provide arbitration offer sliding fee schedules based on the size of the claim. Pros And Cons Of Mandatory Arbitration Policies For Employment Disputes. Which takes us to the Cons! And most parties in arbitrations will also hire lawyers to help them through the process, adding to their costs. Pros and Cons of Construction Arbitration. There are advantages to arbitration, which include: The process is faster and less expensive than going through the courts. Promoted as a way to resolve disputes efficiently, proponents of arbitration commonly point to a number of advantages it offers over litigation, court hearings, and trials. Efficiency. Copyright © 2021 MH Sub I, LLC dba Nolo ® Self-help services may not be permitted in all states. 2. The pre-requirement was that both parties had to agree to accept the Arbitrator’s decision. APPEAL RIGHTS. How We Help. Cons of Arbitration. Others, however, lament that this lack of transparency makes the process more likely to be tainted or biased, which is especially troublesome because arbitration decisions are so infrequently reviewed by the courts. Friday, February 08, 2019 @ 10:30 AM | By Alexander Gay and Alexandre Kaufman Read or reread all agreements you've entered with a retailer, credit card company, or health care provider that may contain arbitration provisions. Many arbitrators have industry-specific expertise beyond what you would find in the court system. Unlike trials, which must be worked into overcrowded court calendars, arbitration hearings can usually be scheduled around the needs and availabilities of those involved, including weekends and evenings. Learn about the pros and cons of mediation/arbitration, and how having a skilled trial attorney representing you is beneficial regardless because it can pressure the other side. According to a recent study by the Federal Mediation and Conciliation Services, the average time from filing to decision was about 475 days in an arbitrated case, while a similar case took from 18 months to three years to wend its way through the courts. This is the least formal ADR tactic available and the most common. 2. DISCOVERY. In arbitrations, most matters, such as who will be called as a witness and what documents must be produced, are handled with a simple phone call. … Arbitration can be less effective in multi-party disputes or if the parties are particularly resistant to engage. 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