Dispute resolution by arbitration seems like a recent development, but mediation has existed in one form or another for thousands of years. However, instead of arbitrators, you get elders or learned people as the judge of a dispute. And the parties had to represent themselves. Fast-forward to today, and arbitration is still a popular way of settling disputes.
But is it right for you? Companies often seek legal mediation services for all sorts of reasons. This method is undoubtedly advantageous in situations where technical expertise is required, as the arbitrator is usually an expert on the matter.
Here are a few reasons why you should consider arbitration to settle a commercial dispute:
1. Arbitration is private
In the court system, everything is a matter of public record. The general public is free to attend trials and hearings, and the documents can be easily accessed. Arbitration is a private and confidential alternative to dispute resolution.
Any documents submitted are only seen and kept by the arbitrator or the arbitration panel. The arbitration process itself occurs behind closed doors, and once a decision has been made, both parties are often bound by a non-disclosure agreement. There are no documents that people can access.
2. You can choose the arbitrator
If you choose to resolve a dispute through the court system, you have no say on the judge of the case. The judge might not have technical knowledge or experience about the matter of the dispute. In arbitration, both parties can choose their arbitrator.
Why does this matter? It allows you to choose a subject matter expert so they can make a decision based on the facts of the dispute. Whether the dispute involves contracts, real estate dealings, or customer issues, you can always choose someone you can trust to rule fairly. You can even choose to have more than one arbitrator, especially if the case is particularly complicated.
3. Arbitration is faster
If you go through the court system, it can take months before your case goes to trial. And that assumes that there are no backlogs or other systems in the system. In other jurisdictions, you might have to wait a year or even more.
The arbitration process, on the other hand, can start within a few months. You can get a hearing in as short as 2 to 3 months, depending on the complexity of the case.
4. You cannot appeal a decision
Both parties have the right to appeal a decision made by the court. One of the parties can elevate the case to a higher court, and it can either be redecided, remanded to a lower court, or elevated further. The entire process can take years before a final decision can be reached. It is not uncommon for one of the case parties to expire before a decision is made.
In arbitration, the decision reached by the arbitrator is final and non-appealable. If both parties want a quick and final decision, mediation can give them what they want.
Litigation is costly, takes a long time, and can be emotionally and physically draining for the parties involved. Arbitration allows you to resolve disputes in a fair and timely manner, something you might want to consider if you are somewhat exposed.