Advantages to Arbitration

1. More flexibility- In the case of arbitration, the parties have far more flexibility to select
what procedural and discovery rules will apply to their dispute (they can choose to apply

relevant industry standards, domestic law, the law of a foreign country, etc.).

2. Select your own Arbitrator or Mediator- The parties can often select the arbitrator
or mediator that will hear their case, typically selecting someone with expertise in the

substantive field involved in the dispute. The arbitrator (or panel members) need not even be

an attorney. In this way the focus can be on the substantive issues involved rather than on

technical procedural rules. In normal litigation, the parties cannot select the judge, and the

judge and/or jury may often need expert witnesses to explain extremely complex issues. The

greater the expertise of the arbitrator, the less time that needs to be spent bringing him up to

speed.

3. A judge is not involved- Judges are unpredictable and often damage awards are based
solely on whether they like the parties or are upset at one party because of some piece of

evidence such as a photo that inflames the passion of the jury. Judges have awarded claimants

damages that are well above what they would have received through alternative dispute

resolution; and they have also done the opposite.

4. Expenses are reduced – Lawyers and expert witnesses are very expensive. Litigating a
case can easily run into thousands of money. Alternative dispute resolution offers the benefit

of getting the issue resolved quicker than would occur at trial – and that means less fees

incurred by all parties.

 5. ADR is speedy- Trials are lengthy, and in many states and counties it could take years to
have a case heard by a judge .Appeals can then last months or years after that. In a matter of

hours, an arbitrator often can often hear a case that otherwise may take a week in court to try

with live witnesses. With arbitration, the evidence can be submitted by documents rather than

by testimony presented through witnesses. ADR can be scheduled by the parties and the

panelist as soon as they are all able to meet together.

6. Confidential-The parties can agree that information disclosed during negotiations or

arbitration hearings cannot be used later even if litigation ensues. The final outcome can also

be made private if the parties so stipulate and agree. On the other hand, most trials and related

proceedings are open to the public and the press.

7. Party participation- ADR permits more participation by the litigants. ADR allows the
parties the opportunity to tell their side of the story and have more control over the outcome

than normal trials overseen by a judge. Many parties desire the opportunity to speak their

piece and tell their side of the story in their own words rather than just through counsel.

 Conclusion-Because of these advantages, many parties choose ADR (either mediation or

arbitration) to resolve disputes instead of filing or even proceeding with a lawsuit after it has

been filed. It is not uncommon after a lawsuit has been filed for the court to refer the dispute

to a neutral before the lawsuit becomes too costly. ADR has also been used to resolve

disputes even after trial, while an appeal is pending.

 Sample subject matters. Some examples of disputes that can be settled by ADR

include but are not limited to:

 Business disputes- contracts, partnerships, ownership

 Property / Land use disputes- property transfers, boundaries, easements

 Family disputes- divorce, property, custody, visitation, support issues

 Consumer / Collection disputes- repairs, services, warranties, debts, loans

 Employment disputes- employment contracts, terminations, non-compete

 Landlord/tenant disputes- evictions, rent, repairs, security deposits

 Neighborhood disputes / Relational disputes or other civil or

 Insurance disputes- accidents, coverage, liability issues

Disadvantages of ADR:

1. There is no guaranteed resolution-With the exception of arbitration, alternative

dispute resolution processes do not always lead to a resolution. That means it is possible that

you could invest the time and money in trying to resolve the dispute out-of-court and still end

up having to proceed with litigation and trial before a judge.

2. Arbitration decisions are final-With very few exceptions, the decision of a neutral
arbitrator cannot be appealed, with fraud being an obvious exception. Additionally, some

states will not enforce decisions of arbitrators that are patently unfair, a high standard to

meet. Another ground for setting aside an award is if the arbitrator’s decision exceeded the

scope of the arbitration clause or agreement. Some arbitration clauses are broad; others are

narrowly limited to specific disputes. Decisions of a court, on the other hand, usually can be

appealed to an appellate court for a variety of legal grounds and for numerous alleged

procedural errors.

3. Limits on Arbitration Awards-Arbitrators can only resolve disputes that involve

money. They cannot issue orders compelling one party to do something, or refrain from doing

something (also known as injunctions). For example, Arbitrators generally cannot change
title to real property. Of course this is subject to the specific language of the arbitration

clause.

4. Fee for the Neutral-The neutral mediator or arbitrator charges a fee for his or her
services. Depending on the arbitrator or mediator selected, the fees can be substantial (of

course the parties typically agree to divide the fees between themselves). Depending on the

contract language and state law, a prevailing party can be awarded fees and costs. A judge on

the other hand, charges no fees for his services.

5. May have no choice-Often the contract in dispute contains a broadly worded

mandatory arbitration clause. Many lease agreements and employment contracts, for

example, contain mandatory arbitration provisions, as do operating agreements and other

types of business contracts. Unless both parties waive arbitration, most states will compel

arbitration at the request of any party.

Conclusion:

There is no single answer as to whether to pursue litigation or ADR. Instead, the

circumstances of each case need to be weighed and carefully analyzed by all concerned

parties. Knowing all the options is an important first step. This can be done by considering

the advantages and disadvantages of each proposed ADR method.