Arbitration is the alternative choice available to resolve disputes without going for litigation or trial. Both the parties have to agree that a third party arbitrator will act as both judge and jury. Arbitration can be binding or non-binding but quite often it ends in a settlement. In a non binding arbitration no arbitration award what so ever is issued. In a binding arbitration, the arbitrators' decision is final and cannot be disputed or appealed. The parties may even agree to follow the rules put down by the AAA (American Arbitration Association).
It is well known that litigations can last for a very long period of time and often takes years for a case to settle. Unlike in litigation, during arbitration the rules of evidence and related procedures become quite relaxed. One can generalize and expect the following benefits during arbitration.
Less expensive than litigation
Faster process
Lesser involvement with lawyers
Binding and non binding arbitrations possible
Arbitrator's fees is lesser than that for a lawyer
Helps sooner settlement in non binding arbitration
As the arbitrator is not bound by the procedure rules he is more practical
No appeals can be filed on a binding arbitration
Before deciding on arbitration it is essential for the client to reflect and see if arbitration has to be preferred over litigation. This should be done considering all what is at stake, including time and the money involved. The arbitration clause has to be well reviewed preferably with the help of a lawyer.
With non-binding arbitration, the arbitrator makes a determination of the rights of the parties to the dispute but this determination is not binding on them. The award given is just an advisory opinion. Thus here the role of an arbitrator is similar to that of a mediator in a mediation. However unlike in mediation the arbitrator remains totally away from the actual settlement process though he might give suggestions. What happens after a non binding arbitration? Well subsequent to a non-binding arbitration, it is up to the parties involved; they are free to pursue their claims either via the courts, or by a binding arbitration.
It is well known that litigations can last for a very long period of time and often takes years for a case to settle. Unlike in litigation, during arbitration the rules of evidence and related procedures become quite relaxed. One can generalize and expect the following benefits during arbitration.
Less expensive than litigation
Faster process
Lesser involvement with lawyers
Binding and non binding arbitrations possible
Arbitrator's fees is lesser than that for a lawyer
Helps sooner settlement in non binding arbitration
As the arbitrator is not bound by the procedure rules he is more practical
No appeals can be filed on a binding arbitration
Before deciding on arbitration it is essential for the client to reflect and see if arbitration has to be preferred over litigation. This should be done considering all what is at stake, including time and the money involved. The arbitration clause has to be well reviewed preferably with the help of a lawyer.
With non-binding arbitration, the arbitrator makes a determination of the rights of the parties to the dispute but this determination is not binding on them. The award given is just an advisory opinion. Thus here the role of an arbitrator is similar to that of a mediator in a mediation. However unlike in mediation the arbitrator remains totally away from the actual settlement process though he might give suggestions. What happens after a non binding arbitration? Well subsequent to a non-binding arbitration, it is up to the parties involved; they are free to pursue their claims either via the courts, or by a binding arbitration.