While many businesses prefer settling disputes through the arbitration process, others maintain that using a commercial litigation lawyer will ensure a better outcome because it is more strongly based on facts and law. Here are key differences between arbitration and litigation.

1. A Neutral Third Party

Arbitration is a dispute resolution process that involves appointing a neutral third party to study the dispute, listen to the parties involved and make suggestions on the best ways to resolve the issue. Litigation, on the other hand, is a method where disputing parties resort to legal proceedings for the settlement of disputes.

2. Civil Vs. Criminal

Arbitration is always civil in nature. On the other hand, commercial litigation can take the form of criminal litigation or civil litigation depending on the nature of the dispute.

3. Confidential Vs. Public

The arbitration process is usually confidential. The settlement of disputes is done in private, and the details of resolution remain top secret. Conversely, litigation is a public proceeding.

4. Location

Disputing parties decide on a neutral location for the arbitration process. This means the parties seeking settlement have the liberty to choose a meeting place they consider comfortable and convenient enough to proceed with the arbitration process. On the contrary, commercial litigation only takes place in the court of law.

5. Speed

Arbitration resolves disputes a lot faster than commercial litigation. Since both parties don’t have the right to appeal during arbitration, it results in a speedier resolution. Litigation, on the other hand, allows disputing parties to appeal the process, causing delays in resolution.

6. Flexibility

Arbitration allows for flexibility. Once the process has started, disputing parties can set limits for the interrogation of witnesses and pre-hearing exchange of document. Parties decide how the process works. On the contrary, litigation follows existing regulations. The parties have no other option than to follow the procedural rules.

7. Presiding Judge or Arbitrator

The soundness of any adjudication depends large of the experience and knowledge of the arbitrator or judge. In arbitration, the parties appoint the arbitrator to handle the resolution process. Also, the arbitrator handles any pre-hearing disputes between parties before deciding the matter, while in litigation, the parties have no say in choosing who decide the matter. The court assigns a judge to a case. As a matter of fact, a single court case may be handled by multiple judges.

8. Costs

When it comes to cost, the arbitration process is less costly than commercial litigation primarily due to its speedy resolution process. In court litigation, the pre-trial discovery process consumes a significant amount of money, thus increasing costs.

9. Decisions Made

In arbitration, the decision made by the arbitrator is final and binding in nature. You cannot appeal the decision, even if the arbitrator makes a mistake of fact. In contrast, commercial litigation allows parties to appeal the decision to the higher court and request a review.

The nature of the dispute will determine whether to proceed in either arbitration or commercial litigation.