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.
The efficiencies and potential advantages of arbitration over litigation include:
– Disputes tend to be resolved faster and less expensively.
– Parties in dispute can directly present their case, or their attorneys can be involved.
– The parties have some control over who will be arbitrating their dispute, whereas in litigation the selection of the judge who will preside over the case tends to be outside of their control.
– Time consuming and expensive pre-trial discovery is avoided.
– Scheduling is more flexible than judge-dictated appearances.
– Procedural rules are more streamlined than in litigation.
– With the arbitrator serving as judge and jury, the final determination of the case is expedited and, given that the person deciding the case has an extensive legal background, may have a greater tendency to be grounded in legal precedent.
– The outcome is made public only if the parties want it to be.
Possible disadvantages of arbitration are:
– Litigation offers established appeal processes that are not available in binding arbitration.
– Highly complicated disputes may benefit from more thorough discovery processes and other procedural rules of litigation.
Another form of ADR is mediation, in which a neutral third party (again, a retired judge or experienced negotiator knowledgeable about the law) works with the parties of a dispute to seek to arrive at a mutually acceptable resolution. While mediation is attractive as an approach to finding common ground among all parties involved, submitting to binding arbitration is more likely to bring an efficient resolution to a dispute. Parties in mediation do have the option of proceeding to litigation if they cannot reach agreement through the mediation process.
More disputes are being resolved through ADR. Not all conflict situations may be suitable for alternative dispute resolution, but in many instances ADR can represent a faster and less costly alternative to lawsuits.
Due to the clear advantages of arbitration over litigation in any number of situations, and the need to preserve this important dispute resolution process, ILR has established the Coalition to Preserve Arbitration. The Coalition's membership is varied and broad. AT&T is one member of the Coalition and has provided legal and technical support on an in-kind basis in connection with our arbitration-related activities. This disclosure is being made to comply with the requirements of the Lobbying Disclosure Act of 1995, as amended by the Honest Leadership and Open Government Act of 2007.