Definition of Arbitration:

Arbitration is the process by which the parties to a dispute submit their differences to the judgment of an impartial person or group appointed by mutual consent or statutory provision.

                                    The American Heritage Dictionary of the English Language, 5th Edition


Arbitration is a form of Alternative Dispute Resolution, meaning that the dispute is resolved outside of the court system. The process of Arbitration has long-standing use in the American legal system, dating back to the 18th century.  Today, Arbitration is a widely used dispute resolution alternative.

Arbitration is much like an informal trial.  In a trial, the judge or the jury make findings about the facts of the case and what relief should be granted.  In an arbitration, either a single arbitrator or a panel of arbitrators make findings (decisions) about the facts of the case and what relief should be granted.

Parties to a legal action can agree to submit to arbitration in order to avoid the increased expense and time associated with litigating in court.  Arbitration also serves to lighten the load of a severely overburdened court system.

The decision to arbitrate can be entirely voluntary or required by a contract or other agreement.

Although there are many benefits to the use of Arbitration, because the award of the arbitrator is binding on the parties, the decision to arbitrate is an important one.  Parties entering into voluntary Arbitration should take the time to consider the pros and cons of Arbitration with respect to their dispute.


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