Solving disputes using arbitration, one of the forms of alternative dispute resolution, is highly effective and cost efficient when compared to court and legal fees. Entering into arbitration means that any decision the arbitrator comes to will be legally binding on the parties involved in the dispute. You can reach a settlement by a third party who will review the case and impose a decision.
There are other forms of alternative dispute resolution, such as mediation which is a form of settlement negotiation organized by a impartial third party called a mediator and conciliation. Arbitration is usually used for resolving commercial disputes, such as under consumer and employment matters. It will be facilitated by the contract terms in employment and commercial relationships.
Arbitration can be entered into either voluntarily or through mandatory arbitration which is enforced through statute or a contract that was voluntarily entered into. Further to this an arbitrator’s decision can then either be binding or non-binding, which is very similar to mediation. However, the difference between arbitration and mediation is that a mediator will try and help the parties find an agreement to continue a good working relationship, where as a non-binding arbitrator decision will not be involved in the settlement process at all and will only identify who is liable for the dispute and where applicable, show an indication of the damages payable. It must be remembered that arbitration is not the same as judicial proceedings, expert determination or mediation.
Generally parties like to use arbitration to resolve their disputes because of the numerous advantages to litigation. When the dispute is quite technical, arbitration is good because you would be able to appoint an arbitrator with a reasonable level of expertise in that area, which in litigation, judges cannot be chosen. The arbitration process is much quicker than going to court and is cheaper and more flexible for companies. Arbitration for companies is a very good option as the proceedings and decision are not open to the public as they are confidential, which means reputations will be upheld.
However, just like any other form of dispute resolution, there are a few disadvantages. It can become quite complicated and may be subject to pressures from law firms representing influential and prosperous parties. If in the event that arbitration is mandatory and therefore binding, the parties unfortunately waiver their rights to go to court and have a judge decide the case if the party is unhappy with the result from arbitration.
For more legal advice and information, and for free legal resources I suggest you visit lawontheweb.co.uk.