Litigation is expensive, time-consuming and it can potentially ruin valuable business relationships. This is why savvy business owners go out of their way to avoid needless litigation.
One good strategy for avoiding litigation is to try arbitration as a substitute. Many business owners find that arbitrating their disputes saves money, time and it may also give more fair results in certain circumstances.
How can arbitration save money and time?
With arbitration, you will not need to wait weeks or potentially months for the courts to have time to hear your case. Arbitration typically starts as quickly as the participants’ nominate arbitrators. Most of the time, arbitration involves selecting a panel of three. The defendants select one arbitrator and the plaintiff selects the second. Then, the two arbitrators select a neutral third.
Once this happens, the panel of arbitrators is ready to hear the case. This is usually much faster as compared to traditional litigation.
How can the results be more fair?
A big advantage of arbitration is that the parties get to choose the arbitrators. While a judge is a law expert, that does not mean the judge is an expert in your particular business vertical. Selecting subject matter expert arbitrators often helps you get through the trial process much quicker since you will need to explain fewer basics to them.
Additionally, results with arbitration are typically binding. In fact, it can be more difficult to reverse the decision of an arbitration panel as compared to that of a judge. This makes arbitration far more “final” than mediation but much more efficient than litigation.