What is the Difference Between Litigation and Arbitration?

The main difference between litigation and arbitration lies in the process of resolving disputes. Litigation is a legal process where a court decides the outcome of a dispute, while arbitration involves appointing a neutral third party to study the case, receive evidence, and make a binding decision. Here are some key differences between the two:

1. Setting: Litigation takes place in a public courtroom, while arbitration occurs in a private setting, typically chosen by the parties involved.
2. Voluntary nature: Arbitration is characterized by its voluntary nature, meaning that both parties must agree to submit their dispute to arbitration.
3. Decision-maker: In litigation, a judge or jury decides the outcome of the case, while in arbitration, an arbitrator or a panel of arbitrators makes the decision.
4. Cost and time: Arbitration is generally faster and less expensive than litigation due to a compressed schedule and less stringent rules of procedure and evidence.
5. Appeal: Decisions made in litigation can be challenged in an appellate court, while arbitration decisions are generally binding and final, with limited recourse for appeal.
6. Flexibility: The arbitration process can be more flexible than litigation, allowing the parties to decide where they want hearings to take place and have input into the selection of arbitrators.

When choosing between arbitration and litigation, attorneys should consider the unique circumstances of each case and the preferences of their clients. While arbitration offers advantages such as cost-efficiency, speed, and privacy, litigation provides opportunities to set legal precedents and compel uncooperative parties.

Comparative Table: Litigation vs Arbitration

Here is a table comparing the differences between litigation and arbitration:

In summary, litigation is a public legal process that takes place in a courtroom and is decided by a judge or jury, while arbitration is a private process that resolves disputes through a neutral third party called an arbitrator. Arbitration is often faster and more cost-effective than litigation, and it may provide more autonomy in the decision-making process.