Arbitration is different from mediation, in that, an arbitrator listens to the parties’ presentation of their evidence and makes a decision that is binding on the parties. Arbitration is often times used when parties want a private venue for deciding their dispute, rather than having their case heard in court with their filings and their trial open to the public.
Parties are sometimes obligated to use arbitration when they enter into a contract with one another that provides that arbitration shall be used to resolve any dispute or interpret the contract. More and more arbitration and/or mediation provisions are included in Wills and Trusts for example. Arbitration is sometimes used when there is a unique issue or area of the law involved in the case and the parties want a person with experience or specific knowledge to decide the dispute. Other times parties simply do not want to wait for a trial date from the Court or they do not want to get mired down in the overly formalistic rules of evidence that can slow down and disrupt the presentation of the facts of the case, or provide a basis for appeal down the road.
Arbitration is typically cheaper, faster, less formal and easier to schedule than traditional litigation through the courts and again the decision is private and confidential.
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