Disadvantages Of Arbitration

Arbitration is an alternative dispute resolution that has been commonly used in recent years in the employment agreement and commercial contract. The differences between arbitration and mediation are that the third party makes a decision of outcome. Basically, it is a process of any disputes that the solution can make it outside of the public court system. The parties select their arbitrator however they want, or they can get a help from the American Arbitration Association to find an available arbitrator. Furthermore, the process of arbitration is similar to court such as bring witnesses, proof of evidence (Barnes 2017, 28). There are two types of arbitration including a private and judicial arbitration. The “private arbitration” is the simple

First of all, arbitration can save time and cost instead of a long trail and expensive lawsuit. It can be proven that the speed of solving the dispute is less than court. One of the reasons that the businesses use the arbitration. There are some examples from AAA reports in 2008, the median length of time is from 238 days to 7.9 months. On the other hand, under U.S. District Court of median length of time is from 30.7 months in jury, and 27.0 months for the non-jury cases. Another reason that the businesses use the arbitration is cost. Even though the basic access to the courts is free, however, the overall cost is cheaper in arbitration. There is no statistical information comparing with the cost, but the evidence of using arbitration is cheaper. Next, flexible process, it can create arbitration contract based on both parties’ essential requirements. It can be less formal, and minimize the risk of business relationships. Next, subject matter expertise, it allows the parties to choose their settlements based on knowledge and issue. Next, finality, the court decision is restricted to only certain issues, which indicates that the most results are firm. The result is very important, especially in business transactions. Finally, and most importantly, arbitration is to protect privacy and confidentiality agreed upon by both parties. This is very important in the business world because dispute can be dealing with important information regarding the company or trade secrets