Arbitration substitutes a private adjudicator for a court. The parties present evidence and argument to one arbitrator or a panel, who issues an award. Binding awards are enforceable as judgments and subject to review only on narrow statutory grounds.
Procedure is governed by the arbitration agreement and the rules of the administering organization, typically allowing far less discovery than litigation.
Alternative Names:
Arbitral Proceeding
Why it Matters?
The trade is speed and privacy for finality and limited discovery. For defendants, arbitration usually means no jury, no appeal on the merits, and reduced discovery cost, which is why arbitration clauses appear throughout consumer, employment, and long-term care agreements. The corresponding risk is that an erroneous award is essentially uncorrectable, since legal error alone is not a ground for vacatur.
Frequently Confused with
Related terms
Frequently asked questions
Can an arbitration award be appealed?
Is arbitration always cheaper than litigation?
