Advantages of Arbitration

Arbitration is a procedure that parties to an agreement may use in order to resolve their disputes outside of the courts.  

Litigating in court is often an expensive, time-consuming and emotionally draining experience.  In order to avoid this, many parties to a contract agree to arbitrate, rather than litigate, through a contractual provision called an arbitration clause.  

An arbitration clause compels the parties to resolve any disputes that they might have through arbitration. This way, the parties are contractually bound not to sue each other, but to instead settle their disputes without judicial involvement.

Arbitration can have many advantages when it comes to dispute resolution.

1. Choice of Arbitrator

Unlike going to court, where a judge is assigned to your case, in arbitration the parties select the arbitrator.  In court, who you wind up with as the judge on your case often depends upon the luck of the draw. There is no science behind it.   With arbitration, the parties may mutually select the arbitrator. This enables them to pick somebody with specialized experience in the subject matter of the dispute.  For example, if the dispute involves a construction matter, the parties may select an arbitrator with a great deal of experience in that field.

2. Time and Expense

Sometimes, but not always, arbitration is a faster and less expensive option.  Unlike courts, which have highly-detailed and complex rules of procedure, arbitration is an informal process.  This may allow for a streamlined decision taking less time and therefore costing less money.

3.  Scheduling

When going to court, the court (judge) schedules the appearances and conferences.  With arbitration, the parties’ convenience is paramount and the arbitration session is scheduled according to the parties’ schedules.  

4. Privacy

Court documents are public records.  Therefore, they may be viewed by anybody who wishes to see them.  Arbitration may be held privately. Transcripts and documents are not available to the public.  In fact, it is possible to have the parties themselves subject to a non-disclosure agreement regarding the arbitration.  This means that after the arbitration is over, the parties will not be able to discuss it with others.

5. Custom-Made Parameters

The parties to arbitration may agree on the parameters of the arbitration award.  For example, they can ‘cap’ how high the arbitrator may go in awarding money to either party.  They may also limit the type of damages awarded, such as punitive damages and/or attorney fees.  Perhaps more important, the parties may agree on the procedural rules, something that courts generally do not allow.

If you are entering into a contract that contains an arbitration clause, you should certainly have an attorney available to assist you with the contract review and preparation.  Should you find yourself in this position, contact the Greenbaum Law Firm, P.A. to schedule a consultation today.

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Greenbaum Law Firm, P.A.

The Greenbaum Law Firm, P.A. is a boutique, client-centric law firm concentrating in the areas of business and corporate law, contracts and agreements, and real estate. Our unique approach to the practice of law consists of positioning our clients at the center of the legal practice and pursuing their objectives in the most efficient and transparent manner.

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