Court legal proceeding (litigation) is often the solution we have to resolve a dispute. But it takes time, is statutory, convoluted, and expensive. Arbitration, on the other hand, can provide a much quicker, more cost-efficient, and more flexible.
Arbitration can benefit both individuals and corporations. Insurance claim disputes, defamation disputes, divorce disputes, medical malpractice disputes, and other issues involving conflict between parties can be resolved with the method.
What’s an Arbitration Proceeding
When two parties are in dispute with each other, the law has given them two options to resolve the situation: litigation, and arbitration. Litigation requires a court hearing, and the outcome of the conflict is in the jury’s hands. In contrast, arbitration only involves the two conflicting parties and a disinterested arbitration lawyer.
The process of an arbitration proceeding requires two parties to attend the procedure voluntarily. There must not be any coercion from one side. Otherwise, the result of the proceeding may not be verified by the administrator and the state.
The first step of an arbitration proceeding requires either of the two parties to send an arbitration demand regarding a conflict. In that document, the arbitration format, the arbitrators, evidentiary rules, and the controlling laws. If the consignee agrees, then the whole process can go the next step, that is to arrange an arbitration meeting. Unlike litigation, arbitration can offer the stakeholders confidentiality. There is no need for a public hearing, and no press is involved.
When an Arbitration Proceeding Fails
Arbitration gives the conflicting parties authority to either agree or disagree to the arbitrator’s decision. In one scenario, where it cannot achieve any deals, an arbitration agreement may proceed to a lawsuit. And the court’s charge would be on the suing party. It will be a good move if you are confident enough with the strength of your case. In the second scenario, only several points that have turned out to be the agreement killers. And in that case, mediation and negotiation are available. You may proceed with another arbitration containing new deals.
The Cons of Arbitration
Arbitration may sound like a terrific method to resolve any disputes. But in fact, like other legal products, it is not without flaws.
First, the objectivity of an arbitration result is difficult to evaluate. Both parties have agreed to authorize a third party to resolve their dispute. Each party states their terms, and then the lawyer decides what the fairest outcomes for both are.
However, because of the discretion itself, no one knows whether the third party is genuinely disinterested and unbiased in the conflict. And by now, you will begin to see how complicated it is to appoint the right arbitration firm.
Second, if there is a power imbalance between two conflicting parties, such as in a dispute between a company and an employee, arbitration is prone to be misused as a take-or-leave instrument. The outcome might be unfair, but it is represented as the fairest one by the arbitration firm because it favors big corporations more than individuals. After all, the law is an industry where big cash flows like a stream.…