Advantages of Arbitration

Arbitration has a number of advantages over both adjudication and mediation in many instances. First, it is more flexible than adjudication. The parties can choose the arbitrator themselves, who may be an expert in the field, whereas a judge is unlikely to have the appropriate technical expertise. Thus, arbitration is especially suited to complex and highly technical commercial disputes.

Second, the timing of the hearing can be adjusted to meet the parties' needs. In most cases, the process can be completed much more quickly than is possible through the courts. Since time is usually money, a faster process has double benefits in many cases.

Third, arbitration is private. Although the parties may disclose what happened afterward (unless they mutually agree not to), the documents and the hearing itself are closed to outsiders. This can help preserve positive working relationships. It also permits the protection of trade secrets and other information that parties (especially businesses) would prefer be kept private.

Fourth, most arbitration decisions are final and binding. This means that the case will be brought to a close quickly. It will not be drawn out for years and years through an endless (and costly) appeals process.


Many of these benefits are provided by mediation as well, but arbitration works in cases in which mediation does not. Mediation does not work well, for instance, in cases that revolve around questions of fact or legal interpretation. In these instances, an adversarial process is often more effective. Arbitration is also superior to mediation when the relationship between the parties has completely disintegrated. Mediation requires at least some degree of communication, cooperation, and trust. If these factors are absent and cannot be rebuilt by a mediator, either arbitration or litigation is likely to be the process of choice.