What is Arbitration ? What are its main advantages?

It is a form a conflict resolution that consists in avoiding litigation. Resorting to arbitration means the parties involved choose to settle a legal dispute in private, rather than taking it to court. The most common types of arbitration are commercial arbitration, consumer arbitration and labor arbitration.

Main advantages of arbitration:

• It is consensual: Arbitration cannot take place if both parties do not agree to it. This process is rather informal and less time consuming since it does not follow strict legal stages. In most cases, litigants find it also advantageous because it is a faster way to resolve a conflict.

• It is neutral and parties choose the arbitrator(s): Litigants are free to choose one or more arbitrator. They need to find a mutual understanding on who will be the best person to settle their dispute. Ideally both parties opt for a third-party who is not only impartial but also has the desired knowledge, experience and expertise to impose a final decision.

• It is confidential: Generally, it is strictly confidential. It is particularly important to respect certain restrictions on documents’ disclosure. Hence, arbitrators must remain discrete. Both parties are then heard and the sentence is made public only with their consent. In the same way, nor the media or the public should intervene.

There are also some disadvantages in choosing this method such as a lack of transparency, the rising costs, the fairness of the final decision and sometimes a party questions the arbitrator’s objectivity. It is also important to keep in mind that in most cases the final decision cannot be appealed unless there is evidence of corruption or fraud.

Before opting for a resolution technique, be aware of the possible drawbacks and get advice from your lawyer in order to make an informed and adequate decision.

What is Arbitration ? What are its main advantages?