Looking At The Pros And Cons Of Arbitration

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Are you suffering from crippling debt? Are you have a dispute with a contractor over money? Are you going through bankruptcy?

If you’re dealing with these kinds of situations and it appears you might be in for a lengthy, costly court battle, arbitration might be a better solution. Arbitration helps bring solutions to problems without having to go to court and can be an easy way to settle a claim.

If you’re considering arbitration, it’s important to know both the advantages and disadvantages of the process. It can bring about a quick solution to a problem you might have, but it isn’t for everyone.


  • Money saved: In several ways, solving a dispute through arbitration is much less expensive. The arbitrator’s fee is less and there’s no time or money wasted on having an expert witness testify since there is no trial. Disputes are also resolved quicker because the rules of evidence in an arbitration case are more relaxed and rather than having to testify in court, you can in some cases just submit documents to state your case. This saves you money too since you won’t have to spend money to go to trial or to travel to court, especially if it’s out of state.
  • Privacy: While trials are most often done in a public setting, arbitration cases are private, so if you’re going through a particularly difficult process, you can breathe a little easier knowing the process and it’s resolution are going to be confidential.
  • Problem solved: Disputes are often resolved quicker since an arbitration date is often set more quickly than a court date. It eliminates a lengthy trial as well. Today, experts say the percentage of civil cases that actually reach trial in Federal courts is estimated at about one percent, so even at a high level arbitration is a popular choice for resolving disputes.
  • Fairness: In arbitration cases, both sides often agree on the arbitrator. This helps the case run smoother since both sides know the arbitrator is going to be fair and impartial.
  • Last word: In most cases, the decision an arbitrator makes is binding, which means there is little chance for appeal. This helps bring cases to a close faster and settles the matter for all parties involved.


  • Last word: While dealing with an arbitrator and going through the arbitration process can be beneficial because it results in a binding decision, that binding decision can also have negative consequences. Since the decision is binding, that means there’s no real opportunity to appeal. That means if the arbitrator doesn’t rule in your favor, there isn’t much you can do to change it.
  • Questions: While the goal of an arbitrator is to be fair an impartial in a case, but each arbitrator is different. Arbitrators are required to follow laws, but they might also consider the “fairness” of the positions of both parties rather than following laws to the letter. If you’ve got a strong case based on law and the arbitrator rules different, you may end up on the losing end in a dispute.
  • Limitations: In some cases, both parties don’t agree to arbitration until they are already in litigation. At that point there’s really no avoiding the expenses that you’re trying to avoid by choosing arbitration.
  • Money: If you’re trying to enter into arbitration for a modest amount of money, then it may not be the most economical choice to go through arbitration depending on the fee of the arbitrator. In some cases, it may be a better choice to try a case in front of a judge in local district court.
  • Requirements: In some contracts, mandatory arbitration allows one party in a dispute to force the other party into arbitration. In some cases, particularly in company disputes where one party does repeat business with the other party, impartiality can be lost.

If you’re considering settling a dispute through arbitration, it’s best to look at the pros and cons to ultimately decide whether it’s the best way to settle your dispute. Whether you’re dealing with real estate disputes, trying to hash out personal matters in family court or dealing with bankruptcy, arbitration is just one option for consideration.

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