Arbitration is a process whereby parties in dispute refer their disagreement to a mutually acceptable, knowledgeable, independent third party - an arbitrator - agreeing in advance to be bound by the arbitrator's decision.
Some disputes, by their very nature, can only be settled by litigation. Many, however, can be settled by arbitration, with significant benefits to the parties involved and to society at large.
The advantages can include the following:
* Arbitration is faster in that disputes settled in court can often take many months or years. With arbitration, these same disputes can be settled in weeks.
* Arbitration is more expert in that disputes taken to court are settled by judges who, while unquestionably expert in law, may or may not have particular expertise in your field.
* Arbitration is private in that Courts are public forums and information about your business and personal affairs becomes public knowledge - available to competitors and others you might not wish to have such information. Arbitration proceedings, however, are almost always conducted in private - and only made public with the consent of both parties in dispute.
* Arbitration costs less. Oftentimes, it is significantly less costly than litigation. It can make a difference of many thousands of dollars to the parties in dispute. The savings to the Canadian taxpayers could be very considerable if our overcrowded courts were more often relieved of the numerous disputes that can be settled more efficiently through arbitration.
* Arbitration can maintain goodwill. Arbitration, by its very nature, is less likely than litigation to result in ill will between the parties involved. It increases the chances of reaching an agreement that will satisfy both parties and allow them to work together in the future.
Source: ADR Institute of Canada Inc.