August 10, 2014

Arbitration is a form of alternative dispute resolution that can help people avoid litigation while working out solutions to their legal conflicts. As with any legal process, there are some distinct benefits and disadvantages to resolving disputes through arbitration, and whether or not this is a better choice for disputing parties will depend in the nature of the conflict, as well as each parties’ specific expectations and needs.

In this three-part blog, we will take a closer look at some of the specific pros and cons of arbitration. If you have questions about the arbitration process, are ready to move forward with arbitration or need some other legal assistance or representation, don’t hesitate to contact Denver Lawyer Thomas E. Downey.

The Pros of Arbitration: How Both Parties May Win Using Arbitration

Using arbitration to resolve legal disputes can be more cost-effective and less time-consuming than traditional litigation. Contact us for help with your arbitration needs.

Using arbitration to resolve legal disputes can be more cost-effective and less time-consuming than traditional litigation. Contact us for help with your arbitration needs.

Some of the specific advantages associated with opting to resolve a legal dispute via arbitration include that:

  • Arbitration may reduce legal costs – In some cases, it may cost far less to resolve disputes through arbitration rather than litigation because the process is more straightforward and may be faster. This can mean that disputing parties may end up paying less in legal fees and other costs.
  • Arbitration can proceed faster – Because arbitrators typically have substantially lighter caseloads than judges and courts, there are often less delays in arbitration cases, and these cases can get underway sooner than they would likely start in the traditional court system.
  • Arbitration can feel more fair – Because arbitrators are unbiased third parties that both parties may have a role in selecting, the decisions that these individuals end up handing down in this alternative dispute resolution process may end up feeling like it is more fair than decisions handed down in litigation.

More Pros of Arbitration for Dispute Resolution

  • Arbitration is final – When both parties have agreed to pursue binding arbitration to resolve a dispute (whether binding arbitration was a term of the initial contract signed or the decision to pursue this alternative dispute resolution process was made after the dispute arose), this option can mean that, once an arbitrator rules on the dispute, the case is closed.

    In contrast, this may not be the case when disputes proceed through the traditional court system, where one party may be able to appeal a decision and, consequently, drag out a dispute in court that much longer.

  • Arbitration can be more straightforward than litigation – For many cases, arbitration can reduce the amount of paperwork, motions, hearings and other legal intricacies that may be associated with the litigation process.

    Ultimately, this can mean that the streamlined dispute resolution process available through arbitration can end up making the process far more cost-effective and far less time-consuming.

  • Arbitration is confidential – This can be a huge advantage that arbitration may offer over traditional litigation. The fact is that, when disputes proceed through the traditional court system, matters discussed in court (as well as the evidence of a given side) will become matters of court record – and, therefore, the public record.

    In contrast, all of the evidence and discussions of arbitration can remain confidential, and this can be particularly important for businesses and/or individuals who are in the public eye and are concerned about the dispute in question damaging their reputation.

The Cons of Arbitration

Although there are various benefits to opting for arbitration to resolve various types of disputes, this process can have some downsides. Specifically, some of the drawbacks to arbitration may include (but are not necessarily limited to) the facts that:

  • Arbitration may end up being more expensive than litigation – Unfortunately, arbitration is not always as cost-effective as it may promise. This can be particularly true if arbitration is not binding, the arbitration process is not successful at resolving the dispute and/or either party in the dispute brings the matter back to court for litigation after arbitration.

    In fact, if non-binding arbitration leads to litigation after this alternative dispute resolution process has not been successful, the costs of arbitration may end up being greater than if both parties had simply moved forward with litigation in the first place.

  • Arbitration may end up being as long as litigation – Just as arbitration may end up not being as cost-effective as it may seem, so too may it end up being as drawn out as litigation itself.

    In fact, if either party in the dispute wants to try to frustrate or drain the resources of the other party, they may file excessive motions and use other legal strategies to prolong the process. Ultimately, this can end up making arbitration take as long as – or potentially even longer than – litigation.

  • Arbitration may not always be as fair as it seems – Despite the fact that arbitration may be lauded for being an unbiased method of resolving disputes, in practice, this may not really be the case. In fact, if the terms of arbitration stipulate that one party has the choice in selecting an arbitrator to oversee binding arbitration, this can end up meaning that the selecting party chooses an arbitrator with whom that party regularly works. In turn, this can mean that the chosen arbitrator is inherently biased towards the party that chose him or her.

    In such cases, the arbitration process can end up being far less fair or unbiased than traditional litigation.

  • Arbitration may not end up resolving the dispute – Although arbitration is often binding, it does not have to be. What this means is that, if non-binding arbitration is the dispute resolution process selected, this process may end up getting nothing done because either party may take the matter back to court if or when they are not satisfied with the outcome of the process.

Denver Arbitration Lawyer at Downey & Associates, PC

Do you have questions about or need representation for arbitration? If so, contact Downey & Associates, PC. Since 1983, Denver Arbitration Lawyer Thomas E. Downey has been providing individuals and businesses in the Denver Metro Area and throughout the U.S. with the highest level of legal services.

At Downey & Associates, PC, we have the integrity, experience and resources necessary to ensure that you will receive the highest level of personal service, the highest quality legal services and, ultimately, the best possible resolution to your case.

Contact Us Today

We encourage you to learn more about your rights and options, as well as our various services, by calling us at (303) 813-1111 or by emailing us using the contact form on this page.

From our law offices in Centennial, we serve clients throughout Colorado and the U.S.

Categories: Arbitration, Blog