Comparison of Arbitration and Litigation Essay Example

Introduction

This paper will explore arbitration and litigation and their advantages over each other. Arbitration is the process where two parties in the dispute agree to follow the process set down by a third party as a way of settling their disputes without going to court. Arbitration is a private way of solving disputes where the parties pick out an individual, generally known as an arbitrator, who decides the results while following a procedure agreed upon by the parties. An arbitrator needs to be in a neutral position who needs to come up with a binding decision to the case. Witnesses also are considered to provide evidence and as to testify where later on is examined by both sides. Arbitration allows the two sides to agree on a process that helps the arbitrator on decision making when both parties agree. Most parties consider arbitration before entering into such agreements. Arbitration helps one to come up with a common ground which comes with a good long relationship. The evidence is the most important thing when using arbitration as a way of solving disputes.

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Arbitration is mostly accessible, efficient, and time effective way for solving disputes than litigation. The arbitrator is the one to handle the dispute since is the one who has the power. If the two parties disagree from the arbitrator's decision, therefore, they appeal on his decision and go for a lawsuit. Arbitration is an alternative to litigation.

Litigation, however, is an old way of taking disputes through a court where the judge or jury will come up with the outcome based on known laws and legislation. Litigation is a complicated process where you spend a lot of your time in pre-trial motion practice which can take 3 to 4 years (Lucas, 2016). Such a process is time-consuming and too financially and costly. For instance, a business case usually takes months to be resolved, and others have gone far to more than a year. Expenses like paying lawyers and witnesses are one of the things that make litigation too much expensive than arbitration. The more time used for the pre-trial, the more fees applied. However, litigation is not only a process of solving disputes but also a process of winning arguments. Furthermore, litigation is unsuited in solving technical issues because neither the jury nor the judge has little knowledge and experience to the subject matter of the technical dispute between the two parties ("Arbitration vs. Litigation - What Is the Difference?", 2018). However, they opt to seek knowledge from other expertise like the doctors, engineers, accountants, and other professions. Lack of knowledge and experience causes consequential appeals and wrong decision making. Litigation is usually antagonistic, which means that there is less concern for their solution to be fair. Disturbance of commercial relationship is brought up when the court decisions are not satisfactory to either party. Litigation does not have a mutually acceptable choice instead they have a win-lose scenario from the adjudication of court (Adams, 2012). Therefore if a party is not satisfied with the results from the court, then he or she is advised to seek an appeal for the next trial.

This essay, therefore, considers the advantages and disadvantages of arbitration over litigation and why some cases are better suited to arbitration than court litigation.

Advantages of Arbitration over Litigation

• Confidentiality and privacy- In arbitration, matters involved between the two parties are usually kept private as a right of policy during that process. The advantage of this is that the public does not get any potentially sensitive information where both parties do not carry out the chances taken for any damaging publicity emerge out of the reports of the proceedings. Where else, litigation does not have any privacy since all matters are resolved in courts which is a matter of the public to know in instances of Matt Whitaker where he faces new challenges in the Supreme Court. However, I stand with arbitration over litigation.
• Cost of the process- the sophisticated procedures involved in litigation always result in too expensive costs where else the cost of arbitration is limited according to the arbitrator's and attorney's fee depending on expenses, the size of the dispute, and the expertise of the arbitrator. Hence, the process is speedier and less expensive according to the litigation (Mulaj, 2018).
• Flexible- Arbitration hearings can be organized around availabilities and requirements of the parties involved. Whereas, a trial in litigation will be held around court dates.
• Evidence granted- Evidence process is limited in arbitration where the arbitrator controls every evidence allowed while in litigation allows full accession of evidence to both parties. There are no discovery, interrogatories, and subpoenas processes in arbitration since there is no rule of evidence is not applied.
• The speed of process- The arbitration process is faster than litigation one since when an arbitrator is chosen, the case can be heard as soon as possible. On the other hand, in civil litigation, a case can only be heard only when the court has time for it which can take months or years before it is heard. Now, this shows how arbitration is more advantageous it is to litigation.
• Efficiency- Court proceedings take a lot of time to be heard rather than the arbitration hearings. Likewise, arbitration hearings should be shorter in length and should have a less demanding in its preparation work.
• Decision-maker- There is more freedom in arbitration when choosing the arbitrator. Whereas, in litigation, it is a jury or a judge who has been delegated in the appropriate jurisdiction which will nearly always have a legal background.
• Availability of appeal- There is no appeal option in arbitration except that there is an appeal has been included an arbitration clause. When an arbitrator is biased, therefore, he or she can be removed by a judge when such moments happen. Multiple appeals allowed in various levels in litigation.
• Ongoing relationships- The parties in arbitration are always encouraged to support fully and sometimes to help to come up with a better resolution; they are more probably to work together rather than intensifying their troubles and hostility toward one another.
• Language- In arbitration, the two parties are allowed to choose the language in which they would like the hearings to be conducted. This allows the arbitration to be more convenient for both parties.
• Informality- Proceedings of arbitration is less formal than a trial. Contrary to trials, their proceedings should be held in a courtroom while in arbitration it can be held in a parties' likeliness of choice (Contributors, 2010). Additionally, the rules of process and evidence are highly simplified and composed, hence making the whole process much less formal than a standard trial and giving the parties extra control.

Choosing between arbitration and litigation is a very important decision. Arbitration should be treated by the parties as the first option in almost every kind of dispute. Arbitration is probably the best alternative if any of the factors below present:

• Time-consuming and too expensive where both parties can agree by saving time and money by coming up with short meetings rather than having lawyers' fees and various court hearings.
• Privacy and confidentiality should be among the priorities so that a dispute should not be publicly embarrassing which should be closed from media.
• Both parties have a good reputation for fairness and honesty.
• The parties have a good ongoing relationship.

So is arbitration a process which is more time effective, time efficient and accessible for solving a dispute than litigation? Yes, it is, where it depends on the type of dispute. All disputes should be resolved using arbitration rather than litigation (Arbitration litigation, 2010). But not every dispute will be appropriate to litigation and not every dispute will be appropriate to arbitration. However, each party needs to decide and check out the best dispute resolution which is best appropriate to them. Along with other alternative dispute resolution ways, arbitration facilitates the provision of an attractive alternative to the traditional legal system when finding solutions to disputes. Therefore, it is very wise to be careful when agreeing to go with arbitration because arbitrators are highly controlled and guided by what their parties say in their alternative dispute resolution provision and any concerns or issues can broadly be acknowledged by a well-designed agreement to have a more efficient and fair resolution for all parties involved.

Conclusion

In conclusion, I agree that arbitration is a better choice in a wide range of civil conflicts, like family disputes, commercial disputes, insurances cases, professional liability disputes, and personal injury issues. Arbitration as well is not a good solution for criminal matters which they always need a full court hearing. Arbitration is implicitly praised about its informality, flexibility, efficiency and effectiveness, the speedy system of justice, cost, and privacy and confidentiality. The results of arbitration are always legally binding on both sides and final. The system of arbitration in America has maintained to be a successful endeavor in dispute resolution due to the traditional characteristics of the process have not been changed. As long as this remains true, arbitration should withstand as better to formal litigation as a way for dispute resolution in matters involving labor relations and personnel issues. It is advisable to seek legal advice by using arbitration for solving disputes. Litigation is viewed as the last option because the court has a reputation maintaining duties which facilitate and encourage settlement.

References

Adams, J. (2012). Arbitration - Court powers to stay litigation because of arbitration agreements. Amicus Curiae, 1997(1). doi: 10.14296/ac.v1997i1.1663

Arbitration vs. Litigation - What Is the Difference?. (2018). Retrieved from https://www.thebalancesmb.com/arbitration-vs-litigation-what-is-the-difference-398747Chen, J., & Mansouri, E. (2017). ADR Briefs. Alternatives To The High Cost Of Litigation, 35(5), 74-78. doi: 10.1002/alt.21688

Contributors, M. (2010). Advantages of settling disputes by arbitration. [Place of publication not identified]: Gale Ecco, Print Editions.

Lucas, S. (2016). ADR Brief. Alternatives To The High Cost Of Litigation, 34(1), 7-9. doi: 10.1002/alt.21619

Mulaj, V. (2018). The advantages and disadvantages of arbitration in relation to the regular courts in Kosovo. Hungarian Journal Of Legal Studies, 59(1), 118-133. doi: 10.1556/2052.2018.59.1.7

Pennsylvania Bar Institute. (2010). Arbitration litigation. [Mechanicsburg, Pa.].

Teacher, Law. (November 2013). Litigation can be defined as a contest between and among persons. Retrieved from https://www.lawteacher.net/free-law-essays/litigation-law/litigation-can-be-defined-law-essays.php?vref=1