What is Arbitration and how does it work?
Arbitration is a form of alternative dispute resolution (ADR) where two parties agree to utilise a neutral third-party to settle their differences. This process has become increasingly popular in recent years as individuals, businesses, and governments seek out ways to resolve conflicts without relying on the court system. But what exactly does arbitration entail? Let’s take a look.
What happens during an Arbitration process?
An arbitration process begins when one or both parties submit a written request for arbitration to the other party outlining their demands and expectations.
From there, each party will have an opportunity to present their case in front of an arbitrator or panel of arbitrators who specialise in the matter at hand.
The arbitrator(s) will then listen to both sides and review any evidence presented before making a decision that is legally binding on all parties involved.
The final decision reached by the arbitrator(s) is known as an “award” and can be enforced through the courts if necessary. However, it’s important to note that while awards can be enforced through the court system, they are not considered court rulings and thus do not have any precedential value—that is, they cannot be used as legal precedent in future cases.
Benefits of using Arbitration
One of the main benefits of using arbitration over litigation is that it can often be less expensive since legal fees tend to be lower than those associated with courtroom proceedings.
Additionally, because arbitration proceedings are generally conducted outside of public view, parties can avoid any unnecessary publicity that may arise from taking part in a public trial or hearing.
Finally, because arbitration awards are legally binding on all parties involved, they can provide some assurance that disputes will actually be resolved instead of simply dragging on indefinitely like they may in more traditional methods such as litigation or mediation.
When faced with a dispute between two or more parties, it’s important to understand all available options for resolving said dispute. One such option is arbitration - a form of alternative dispute resolution (ADR) which involves utilising a neutral third-party (an arbitrator or panel of arbitrators) to hear arguments from both sides before issuing an award which is legally binding on all involved.
While this process may not always be ideal depending upon the situation at hand, it can offer several advantages over more traditional methods such as litigation including cost savings and increased privacy throughout the proceedings.
As such, it’s important to understand how arbitration works so you can make an informed decision about whether or not this type of ADR would be right for your particular situation.