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What Are the Advantages and Disadvantages of Arbitration?

Arbitration Definition

If you have a dispute that you need legal assistance settling, is arbitration the answer?  Arbitration at its best can help you swiftly and peacefully settle disagreements in a private and less expensive forum.  This does not mean it is a one size fits all solution.  Read on to learn more about the pros, cons and overall process of arbitration.

Advantages and Disadvantages of Arbitration


Advantage: Arbitration services can be significantly less expensive than going through the full court process.

Disadvantage: While arbitration can be less expensive than other methods, it is not without expense.  You will still need to pay legal and administrative fees, so, depending on your situation, the savings may be nominal.


Advantage: The arbitration process can take significantly less time than going through the courts.  This allows both parties to reach an arbitration agreement and move forward much more quickly and with less emotional distress.

Disadvantage: Some legal issues can be decided by the courts swiftly.  Each situation will have its own set of circumstances and legal issues associated with it.  Consult with one of our experienced attorneys to determine if arbitration will truly be a time saver or if your needs are best met in a court of law.

Emotional Cost

Advantage: The parties involved in arbitration are often encouraged to fully participate in the process.  This can give each individual the opportunity to experience emotional closure as well as minimize hard feelings throughout the process.

Disadvantage: If the parties are hostile from the beginning, it can make arbitration difficult and participation may be challenging.

The Arbitrator

Advantage:  When two parties agree to go to arbitration as opposed to court-ordered arbitration, the parties can agree on who to appoint as the arbitrator.  Even when there is an issue in dispute between the parties, it can be empowering to everyone involved to be able to decide who will hear and make decisions about the case.  This gives both parties an opportunity to appoint someone that has specialized knowledge.  If the issue is construction related, an arbitrator with a background in construction may be selected.  If the parties are unable to agree on a person to arbitrate, the court will appoint one from a pre-approved list.  While the decision in a court-ordered arbitration can be appealed to the court overseeing the matter, by agreement, the parties may agree to make the arbitrator’s decision binding.

Disadvantage: The disadvantage to an arbitrator can be a question of objectivity.  If the selection of an arbitrator is from a pool, favorites may be chosen more often.

Rules of Evidence

Advantage:.  The rules of submitting evidence in arbitration are often much more lenient than the courts.  For example, the arbitrator may allow hearsay in order to obtain a better sense of the issue and facts.  The arbitrator also has the discretion to streamline the discovery process, which can expedite the overall process.

Disadvantage: It is not always to your advantage to have less stringent rules pertaining to admissibility of evidence.  If you present your case to a judge, there are strict rules regarding evidence and what is and isn’t admissible.


Advantage: If you go through private arbitration, it is possible to keep the entire proceedings and outcome confidential.  Both parties may agree to maintain their privacy and keep the arbitration private.  This is very helpful if the dispute involves sensitive or embarrassing information.

Disadvantage: There isn’t one.  When it comes to keeping a dispute and resolution private, arbitration is the way to go.  If you went through the courts and wanted to maintain your privacy, you would need to have your records sealed.  There are only rare instances when a court will agree to this, such as when the issue pertains to a minor.  If both parties agree that privacy is a top concern, arbitration might be the best solution.

Compulsory Arbitration

It is also important to note that the State of Arizona requires compulsory arbitration when the amount in controversy is below a certain amount.  If you are the plaintiff in the dispute, you will be required to file a Certificate of Compulsory Arbitration, which will include the details of your complaint and the amount you are seeking to collect.

If the case value in Pima County is less than $50,000.00, the court will assign an arbitrator.  If you are unhappy with the selected arbitrator, you can strike his or her selection but only one time.  Once the arbitrator has been assigned, you will be given a hearing date after which the arbitrator will reach a decision.  This decision will be filed with the Clerk of the Court.  If you prevail, you must submit the arbitration award and costs to the arbitrator for his or her signature within 10 days. As you can see, there are detailed requirements and timelines when settling your dispute in arbitration.

Court proceedings can be difficult and emotionally taxing.  The specifics of your dispute and the other party will help dictate whether arbitration is appropriate for your situation.  How you proceed can make a big difference in the outcome of your case.  Allow us to review your situation and guide you to the most likely route to success.

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