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Litigation and Arbitration

What are the pros and cons of pursuing litigation versus binding arbitration?

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In contrast to traditional litigation, binding arbitration as an alternative dispute resolution procedure offers:

* Privacy - arbitration proceedings are generally conducted "behind closed doors," without the need to create a public file or record;

* Informality - most discovery and rules of evidence are inapplicable in arbitration proceedings, unless the arbitration agreement specifically requires their application;

* Expediency - the informality of arbitration and the elimination of most or all discovery allow for disputes to be resolved more quickly in arbitration as opposed to traditional litigation;

* Cost savings - because of the informality and expediency, most arbitrations are concluded much more quickly, and therefore much less expensively, than traditional litigation;

* Specialization - arbitration may allow the parties to choose an arbitrator experienced or trained in the subject of the dispute;

* Unpredictability - because arbitrators generally are not required to follow legal precedent or procedural or evidentiary rules, and because many arbitrators are not licensed attorneys, the outcome of arbitration may be much less predictable than the outcome of traditional litigation;

* Finality - most arbitration decisions cannot be reviewed on appeal; thus the arbitrator's decision is final;

* Preservation of business relationships - arbitrating disputes may allow them to be resolved without the antagonism that can develop in traditional litigation, thus allowing a continuation of a profitable on-going business relationship.

issues to consider when including an arbitration provision in your contracts include:

* Whether all ...

Solution Summary

The pros and cons of pursuing litigation and binding arbitrations.