Arbitration vs. Litigation – Substantive Differences Beyond Time and Expense
In an earlier post, “Is Arbitration Quicker, Cheaper and Better for You?” I discussed why having a faster and less expensive dispute resolution mechanism may not be in your best interest. Make no mistake, however, the differences between traditional litigation and arbitration go well beyond the time and expense it takes to complete the respective processes. The following are a few of the more notable substantive distinctions between these two dispute resolution mechanisms:
- Litigation allows for extensive “discovery” (e.g., depositions, document requests and interrogatories) from parties and non-parties. Discovery in arbitration often is limited to document requests, but can be broadened by the arbitrator or agreement of the parties.
- Because arbitrators are not required to abide by any Federal or State Rules of Evidence, they routinely consider information that never would be admissible in court.
- A “bad” decision in a court of law almost always can be appealed. An arbitrator’s decision, on the other hand, rarely can be appealed – even if it obviously is contrary to the applicable law.
- Notwithstanding a lack of empirical data, most litigators agree that arbitrators are much more likely than a judge/jury to issue a compromise decision and/or one based on fairness principles