Arbitration and other alternative dispute resolution (ADR) processes can have advantages over filing lawsuits. Using litigation to resolve disputes is an expensive and time consuming process – taking years to move through the courts, often requiring expensive legal counsel and consuming significant amounts of time for defendants and plaintiffs alike.
To engage in arbitration, two parties involved in a dispute identify an agreed-upon individual to serve as a neutral third party to review the facts and circumstances of the dispute and to issue a ruling to resolve the conflict. The arbitrator is impartial, independent and knowledgeable about the law, typically a retired judge or experienced neutral attorney.
Virtually any type of dispute between private individuals or entities can be addressed by arbitration, including, for example, contract, real estate, employment, and tort disputes.
An agreement to enter into arbitration or other form of ADR can be set out at the beginning of a relationship between two parties through contract language specifying an ADR process in the event of a dispute. Such an up-front agreement can be advantageous, avoiding the dynamic of a dispute arising and then one party forcing the issue into the courts due to a perceived strategic benefit of litigation over ADR.