What is Arbitration?

Arbitration is a form of “alternative dispute resolution.” It is often perceived as a more cost-efficient way of resolving disputes, as opposed to going to court.

In arbitration, a neutral person referred to as an “arbitrator” hears each side’s position and arguments, looks at the evidence presented by each side, and makes a decision about the dispute. This decision is referred to as an “award.” Arbitration is less formal than a trial and the rules are more relaxed than the rules in a trial. Arbitration can be either “binding” or “nonbinding.” In a binding arbitration both sides agree to accept the arbitrator’s decision as final, even if they don’t like the decision. In a binding arbitration, both sides also waive their right to a trial. In a nonbinding arbitration, if either side is not satisfied with the arbitrator’s decision, they can request a trial.

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