Arbitration is an ADR process where the parties present arguments and evidence to an independent third party, the arbitrator, who makes a determination. Arbitration is particularly useful where the subject matter is highly technical, or where the parties seek greater confidentiality than in an open court.
Arbitration may be voluntary, ordered by the court or required as part of a contract.
Arbitration can be a much more formal and structured process than mediation or conciliation. In some ways it is more similar to court, because at the end of the session the arbitrator makes a binding decision.
Some of the main differences between arbitration and other forms of ADR, such as mediation and conciliation, include:
- the people in dispute need to agree before the process that the arbitrator's decision will be binding and enforceable
- there is a much greater need to produce evidence or facts
- there may be one arbitrator or a group of arbitrators to hear your dispute
- the arbitrator may be a specialist in the subject matter of the dispute or have legal qualifications
- at the end of the process the arbitrator will make a decision for the parties.
If an arbitrator makes a decision you are not happy with, you may be able to appeal to a court or other higher authority. However, this may be difficult and require you to point to particular problems with the decision, such as it being biased or unfair. If you have questions about the binding nature of arbitration, you should get legal advice.
Arbitration can be particularly useful where mediation or conciliation have not led to an agreement or if you want a process where a decision is made for you, but is confidential and generally cheaper and quicker than going to court.
Lawyers are often involved in arbitration and may represent the participants. Experts may also attend to give evidence for the arbitrator to consider.