Why Should I Arbitrate?
A) Arbitration vs. Litigation
B) Arbitration vs. Mediation
C) Additional Advantages
D) Possible Disadvantages
Arbitration is a private process, and as confidential as parties so provide, while litigation is a formal process conducted in a public courtroom.
Speed of Process
The arbitration process can be fairly quick. Once an arbitrator is selected, the case can be heard immediately. In a civil litigation, on the other hand, a case must wait until the court has time to hear it; this can mean many months, even years, before the case is heard.
Cost of the Process
The costs for the arbitration process are limited. Costs for litigation include attorney fees and court costs, which can be very high.
Selection of Arbitrator
Parties typically are involved in the selection of the arbitrators(s). Most practitioners, when confronted with a large or complex dispute, have greater confidence in a panel of three arbitrators than in a single arbitrator. Moreover, they usually prefer to permit each party to appoint an arbitrator. Arbitrating parties frequently choose arbitrators on the basis of prior professional or business associations and or pertinent commercial expertise.
Use of Attorneys
Attorneys may represent the parties in arbitration, but their role is limited when compared to litigation.
Discovery in arbitration is typically not as inclusive as in litigation.
Unlike litigation, where discovery is prescribed by rule or statute, in arbitration discovery requires planning by the parties, either in the clause in advance of the dispute or in a separate agreement after a dispute . . . Parties can plan for discovery through their choice of institutional arbitration rules. (CPR Model Clauses and Sample Language)
Availability of Appeal
Most users of arbitration find the finality of an arbitration award appealing. But some parties to major cases are concerned about the possibility of an aberrant award and would like to be able to appeal from such an award to a tribunal of outstanding appellate arbitrators.
In response to that concern, CPR has adopted the CPR Arbitration Appeal Procedure (“Appeal Procedure”) which is set forth, together with a Commentary. The Procedure may be invoked whether or not the original arbitration was conducted under CPR Rules.
CPR does not wish to encourage widespread appeals from arbitration awards. The Appeal Procedure (Rule 8.2) establishes relatively narrow grounds for appeal beyond the statutory grounds under Section 10 of the Federal Arbitration Act.
Section 10 of the Federal Arbitration Act: “The statutory grounds for vacating an arbitration award under Section 10 of the Federal Arbitration Act and state counterparts are limited to matters such as arbitrator corruption, fraud, evident partiality, misconduct and exceeding of powers. These grounds do not go to the merits of the award. The decision in Hall Street Associates L.L.C. V. Mattel Inc., No. 06–989, (March 25, 2008), bars parties from writing contracts that allow court review for arbitration awards.
The information and resources on this website should not be construed as legal advice or opinion, or as a substitute for the advice of counsel.