Because of the increase in cost of litigation, and the more frequent use of arbitration clauses in all forms of contracts, arbitration is used with increasing frequency. Although arbitration is an excellent choice in many instances, it may not be right in every case. This article will discuss the pros and cons of arbitration so that you may know whether it is right for you.
What Arbitration Is
Arbitration is the use of a neutral third party to listen to evidence and render a binding award which generally is not reviewable upon appeal. It is generally initiated by one party to an agreement which requires disputes to be resolved by arbitration. Parties can also agree to arbitrate their disputes regardless of any contractual obligation.
Benefits of Arbitration The benefits of arbitration are many. Some of the more pertinent benefits are described below:
1. The proceedings are private. Generally, cases filed in the court systems are a matter of public record (1). Because arbitrations are conducted pursuant to agreement by the parties, the parties can control the privacy of the proceedings. Thus, disputes that may have a negative impact if disclosed to the public can be more effectively controlled. Moreover, if an adverse award is rendered, such information can also be limited to the public.