Arbitration is a method of Alternative Dispute Resolution (ADR) where the parties involved in a conflict agree to resolve their disputes by hiring a mutual arbitrator. An arbitrator is an experienced legal expert responsible for reviewing the evidence and the arguments presented by each party objectively and reach a decision that is mutually beneficial for everyone concerned.
With the absence of an agreement to arbitrate, the default method for dispute resolution becomes litigation. Litigation can be a cumbersome, inefficient and costly process for anyone involved in a dispute. Hence, opting for arbitration to resolve the disputes not only saves your business unnecessary expenditure in legal fees but also preserves its reputation.
Here’s a closer look at the merits of arbitration as an ADR process:
1) Confidential
A major advantage of arbitration is that it is confidential and ensures the privacy of all the parties involved. However, it is important to consult a skilled arbitrator to ensure she includes an express provision for confidentiality while drafting an arbitration agreement. As businesses involved in a conflict don’t like to welcome unwanted publicity to interrupt with their proceedings, arbitration is an effective ADR method for everyone concerned.
2) Flexible
One of the key merits of arbitration is that it allows both the parties a significant degree of flexibility in resolving their disputes which is not accessible in the case of litigation. Arbitration enables all the member involved in the conflict to tailor the resolution to suit their individual, commercial and practical needs. Arbitration also lets you select an arbitrator as per your convenience and have a greater authority in regulating the logistics like the date, time and place of the proceedings.
3) Definite
Decisions made by an arbitrator are usually considered to be final and binding and are contested only in certain limited circumstances. This serves as an advantage to everyone concerned with the dispute. This is because this finality prevents any delay in the decisions as well as retains the cost of an appeal procedure.
4)Fast Paced
Arbitration is a much more fast paced process as compared to litigation. The arbitrator utilizes only a few days or weeks to resolve the matter. It also considered a speedier process as it does not include the procedures of discovery as necessary in a civil action. Hence, arbitration can be a faster and more effective way to resolve disputes than other traditional options.
5) Cost-efficient
Arbitration is one of the most cost-efficient ways to resolve a dispute. This is because the arbitration fee entailed with the ADR process is much more economical than the litigation fees associated with a civil action. Arbitration is a much more suitable alternative for individuals and businesses who cannot afford to pay for heavy litigation.
Keep these merits of arbitration in mind to use this tool to your benefit and resolve disputes effectively. If your business is involved in a grave dispute with another business or individual, consult a practised law firm to help you reach an amicable settlement today.