Arbitration

Arbitration is the hearing and resolution of a dispute by someone chosen by the parties or provided pursuant to an agreed selection procedure. There are a number of types of arbitration, the most fundamental distinctions being binding and non-binding, and mandatory versus voluntary.

In binding arbitration, the decision of the arbitrator is final (i.e., there is no right of appeal). In non-binding arbitration, the decision serves an informational function but they are not required to accept it. Non-binding arbitration can have binding features, should the parties agree. For example, they could decide that the losing side must pay legal fees if subsequent litigation does not result in materially different results.

In mandatory arbitration, the parties are required in advanced -- by contract -- to submit to arbitration to resolve disputes. In voluntary arbitration, the parties agree to resolve a dispute or an element of a dispute by arbitration after the dispute has arisen

In all forms of arbitration, procedural alternatives are available to fit the needs of particular industries and circumstances. The primary advantage of arbitration, particularly binding arbitration, is the timeliness and economy of a resolution, and the confidentiality of the hearing.