Arbitration - A Flexible Alternative to Court Litigation

Arbitration can best be thought of as a way of having the litigation "process", but with a menu of options which offer flexibility.  Whilst modern litigation in some countries already incorporates case management meetings in which there is some element of flexibility and control by the decision-maker, arbitration allows for even greater flexibility.

Like other alternative dispute resolution, arbitration is voluntary: the parties agree between themselves to use arbitration instead of court litigation.  The parties to a dispute may have agreed that in advance (if this is a contractual dispute), or they may agree between them after the dispute has arisen to handle the dispute by way of arbitration.

Like court litigation, arbitration leads to a decision with an outcome (an "award").  Unlike litigation, however, in some situations the parties may decide between them that the "award" (and the proceedings themselves) will remain private between them.  This confidential nature can be extremely important to those engaging in arbitration, who may need a decision on a dispute from an impartial decision-maker but not want the details of the dispute to be made public.

For those considering arbitration, there may be a choice between an arbitration service which will run the case with a particular set of rules (for example the UDRP relating to domain names), using an "ad-hoc" arbitrator or arbitration panel which adopts a particular procedure and fixed set of rules, or using an "ad-hoc" arbitrator and agreeing the rules between the parties (using the arbitrator to decide where the parties cannot agree on rules and procedure to follow).

For cross-border disputes, or disputes where parties are based in different countries, arbitration can offer more benefits: rather than having to use lawyers in a particular jurisdiction, arbitration may allow parties to use their "normal" advisors (and so potentially strip out a lawyer of cost).  The ability to enforce an arbitral "award" is also easier than enforcing a court judgment from a foreign court in many cases.