Arbitration serves as an essential alternative dispute resolution (ADR) method, providing parties with an efficient and private means of resolving conflicts outside of traditional litigation. It offers several advantages over court proceedings, including flexibility, expertise, confidentiality, and enforceability. As a neutral and binding process, arbitration plays a vital role in today's legal landscape.
The primary role of arbitration is to offer a fair and impartial forum for parties to resolve their differences. Instead of going to court, the parties voluntarily submit their dispute to one or more arbitrators who act as private “judges.” The arbitrator, often chosen for expertise in the subject matter of the dispute, listens to both sides, considers the evidence and arguments, applies the law, and renders a binding decision/award. The expertise of the arbitrator helps render well-informed and sound decisions, enhancing the quality and reliability of the arbitration process.
One of the significant advantages of arbitration is its flexibility. Parties have the autonomy to determine the rules and procedures governing their arbitration, tailoring them to their dispute's specific needs and complexities. This flexibility allows for a more streamlined and efficient process than court litigation, where procedures are often more rigid and time-consuming.
Confidentiality is another essential aspect of arbitration. Unlike court proceedings, which are generally open to the public, arbitration offers a private and confidential setting. Parties can avoid public scrutiny, protect sensitive business information, and maintain the confidentiality of their dispute. This aspect is particularly crucial in commercial disputes where maintaining privacy is often paramount to the parties involved.
The enforceability of arbitral awards is a critical factor that enhances the role of arbitration as an ADR method. Missouri State and Federal Courts have rules and statutes that recognize arbitration awards. This means that parties can have confidence in the finality and enforceability of the resolution.
In short, arbitration is a process through which the parties submit their dispute, either voluntarily, by contract, or by court order, to a neutral arbitrator to make a final decision. Occasionally, the dispute is presented to a panel of more than one arbitrator. If the parties request, the Arbitrator will provide a written decision outlining the specific findings and conclusions made as part of the decision. This process has the advantage of:
Allowing for a substantial saving of time and money when compared to a court case
Allows the parties to present their case to the arbitrator with some formality and rules of evidence
Allows for a final resolution of the dispute that may be the basis for a court judgment on the issue.
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