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The difference between Arbitration and Litigation

published September 18, 2008

By CEO and Founder - BCG Attorney Search left
Published By
( 84 votes, average: 4.7 out of 5)
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Arbitration is different from litigation because it involves a private individual who is called upon to ''mediate'' or ''arbitrate'' between two parties with differences. This third party tries to forge ways for opposing parties to solve their disputes through an arbitration agreement.

In many ways it is advisable to pursue arbitration over litigation when solving disputes. Arbitration has various advantages over litigation, including reduced legal costs and time required to settle disputes. There are also benefits to future business relationships because arbitration can allow companies to continue their relationship after the settlement. Arbitration is therefore typically the better solution in cases of contract breach. Employers may pursue arbitrators who are experienced and have specific knowledge or a background in the line of business they operate, to help gain the upper hand in arbitrations. Arbitrators' who are knowledgeable about aspects of the industry of one of the parties may have solutions that favor this party over the other, unlike those who are not conversant with that field. Ideally though, an arbitrator is to carry out his or her duties in as impartial a manner as possible.

Private and Public Domain Costs versus Litigation

In legal jobs, arbitrators are required to treat all proceedings of the arbitration as confidential. In this view, they are expected to uphold the privacy of the parties involved by taking care not to give out information that may have been obtained during the arbitration process. However, some parties may agree on specific subject matter to be treated as confidential and other material which can be in the public domain.

Information that is in the public domain is that which is available to the public either through the press or other ways. Private information is only to be known to the parties involved and the arbitrator. Information may be allowed into the public domain through a court application by a concerned party.

Firms and individuals pursuing litigation may be accorded private hearings in cases where the parties want confidentiality. Although a private hearing is considered confidential, the courts have ruled that they are not concrete grounds for preventing publication of the judgments. The judges have to determine whether the information should be available to the public by considering the public interest and the fairness and confidentiality of the arbitrator during the proceedings. In cases involving sensitive information, there are various methods that judges can use to prevent information from entering the public domain.

Benefits of Arbitration

Arbitration may be a suitable way of resolving disputes amicably, as opposed to taking lawsuits to the court system. This is because it is usually confidential and the parties involved are engaged directly in settlement negotiations. The arbitrator is also expected to be objective and can give alternative ways of settling the dispute. Another advantage of arbitration is the time required to settle disputes. Since mediation can be engaged in relatively quickly after a dispute arises, settlements can be arrived at more quickly than with litigation cases. Also, the parties involved save considerable costs because of the reduction in legal costs as well as in time taken away from work by staff due to the legal process. Businesses also have better chances of continuing with their relationship after the dispute is solved, and creative accommodations and solutions to special needs may be agreed upon as a component of the settlement. Companies also have opportunities to recruit arbitrators who have training and experience in the dispute.

Challenging an Arbitrator's Decisions

Although this is not common, there are occasions when an arbitrator's decision may be challenged. One common reason is if it is established that the arbitrator, his firm, or one of his or her employees had previous contact with the one of the parties. An example is if the arbitrator may have previously given counsel to one of the parties involved in the disputes.

<<Another reason can be cooperation difficulties. If the arbitrator has arbitrated on other disputes involving one of the parties, if he is of the same nationality as a party involved, if he comes from the same region as one of the parties involved, or if he has previously worked with the party's attorneys, his decision may be challenged because his previous contact or affiliation with one of the parties may lead him to arbitrate in favor of that party.

Enforceability Issues That Arise in Arbitration Agreements

Enforcing decisions made through arbitration can be difficult, especially when they involve more than two parties in the dispute. Another difficulty arises when several parties are signatory to one contract. (i.e., the issue of whether the arbitration clause should be extended to other non-signatory parties of a group of companies). Another difficulty may be the issue of bringing all the parties involved in the dispute that are affected by the matters of the disagreement into one arbitration clause (i.e., how will all the companies involved in a business transaction through different contracts fit into one arbitration clause?).

Getting Arbitration Jobs

The main work of arbitrators consists of facilitating conflict resolution and negotiations through arbitration agreements between the concerned parties. They help to resolve conflicts out of the courts by enabling the parties to reach mutual agreement. Persons who wish to get arbitration jobs should have a minimum of an undergraduate college degree. Backgrounds in industrial relations and law are also beneficial. Some of the skills required for individuals entering attorney/arbitration jobs include experience and knowledge in resolution of disputes. Arbitrators should be able to handle pressures, exercise fairness and integrity, be persuasive, and should be able to accommodate different points of view. In addition, they should be good at researching, analysis, logical thinking, writing, and speaking.

Arbitrators may be employed by nearly any individual or firm that us engaged in business or social activities and involved in a dispute. Their work is simply to arbitrate between parties involved to settle lawsuits out of the court system. Major sectors that employ arbitrators include insurance firms, banks, and corporations, though they are often used by other organizations, in many other fields.

Please see this article to find out if litigation is right for you: Why Most Attorneys Have No Business Being Litigators: Fifteen Reasons Why You Should Not Be a Litigator

Alternative Summary

Harrison is the founder of BCG Attorney Search and several companies in the legal employment space that collectively gets thousands of attorneys jobs each year. Harrison’s writings about attorney careers and placement attract millions of reads each year. Harrison is widely considered the most successful recruiter in the United States and personally places multiple attorneys most weeks. His articles on legal search and placement are read by attorneys, law students and others millions of times per year.

More about Harrison

About LawCrossing

LawCrossing has received tens of thousands of attorneys jobs and has been the leading legal job board in the United States for almost two decades. LawCrossing helps attorneys dramatically improve their careers by locating every legal job opening in the market. Unlike other job sites, LawCrossing consolidates every job in the legal market and posts jobs regardless of whether or not an employer is paying. LawCrossing takes your legal career seriously and understands the legal profession. For more information, please visit

published September 18, 2008

By CEO and Founder - BCG Attorney Search left
( 84 votes, average: 4.7 out of 5)
What do you think about this article? Rate it using the stars above and let us know what you think in the comments below.