Arbitration is, like mediation, a form of alternative dispute resolution that can help companies and others avoid the litigation process. There are a variety of potential benefits to being able to resolve a dispute using arbitration and business owners or those running a business should be familiar with what those are.
Potential benefits of the arbitration process
There are several potential benefits or arbitration including:
- Cost – arbitration is typically a less expensive cost alternative to litigation. The cost can vary with complexity so it is helpful for those considering arbitration to be familiar with the cost-benefit analysis and how it applies to their situation.
- Timeliness – arbitration is typically also a time saver. Because the arbitration process follows more defined timelines that may be more tightly adhered to, it can typically save the parties to the dispute time.
- Fairness – arbitrators are typically selected by agreement of the parties or by a third party which creates an important layer of fairness in the process.
- Finality – arbitration decisions are typically usually difficult to appeal in order to create finality and some level of predictability for the parties concerning the outcome and its finality.
- Simplified process – when compared to litigation, the arbitration process is more simple and streamlined for the participants.
- Confidential – unlike litigation which creates a public record of the dispute, arbitration is a confidential process which can provide more privacy for the parties.
For businesses facing disputes, arbitration can be a simplified process for resolving them in some instances. It is important for businesses looking for solutions to disputes to consider the benefits of arbitration and ensure they understand how it can potentially help them with the challenges they are facing.