Arbitration is a technique for the resolution of disputes outside the courtroom. In arbitration, the parties to a dispute and their attorneys present their case to an arbiter and agree to be bound by the arbitration decision. The arbiter is an impartial third-party who hears the evidence in the case and imposes a decision that is legally binding on both sides and enforceable in the courts.
There are multiple benefits to arbitration. One benefit of arbitration is that a final trial on the matter in dispute is often easier to schedule. Traditionally, a court will issue a trial date for each case, and the parties do not have the opportunity to choose what trial date they are given. Thus, the parties and attorneys often have schedule conflicts. However, in trials, the parties and their attorneys must appear at the time and place stated by the court, regardless of the schedule conflict. Therefore, some parties agree to present their case on their own timeline and allow a private arbiter to hear the case. Another benefit of arbitration is that the case can be tried in a confidential setting. Often parties do not want their private matters heard in a public forum like a courtroom. Additionally, arbitration allows the parties and attorneys to proceed with their case using customized rules and/or procedures.
There are disadvantages to arbitration too. For example, arbitration provides limited avenues to appeal the decision. Additionally, the arbiter is generally unable to enforce orders against a party without the arbitrator’s ruling being reduced to a court order.