The Key Differences between Litigation and arbitration

If a business is facing any disputes, there are many options to settle it down. The two most popular options are Litigation and arbitration means resolving the dispute in a courtroom or taking the matter outside the courtroom. But before choosing any one option, you need to understand the key differences as each process has its pros and cons that should be carefully considered before deciding which route to pursue. Before coming to the conclusion as to which option is the best, let’s understand the key differences between the two terms.

Litigation is a legal and formal process in which a dispute is handled in a courtroom adhering to all strict rules and laws governing the court proceedings.

  • Litigation simply means taking the matter to a court.
  • The judge or jury in the court decides the final outcome or renders the final decision.
  • It is a public procedure with pre-established rules of evidence and rules of procedure, governing how trials are conducted and resolved.
  • The trial judge is appointed by the court without considering the preference of the parties involved.
  • Both the parties may be compelled to participate in daily court proceedings.
  • Litigation usually takes a longer time than arbitration due to legal formalities, formal rules of procedure, evidence, and mostly the backlog of the court which has been aggravated by this covid 19 crisis.
  • Litigation can be a more expensive process.

Arbitration is an informal process where the dispute is handled outside of the court in which both the parties choose an arbitrator or a third party to make a final binding decision on the matter.

In arbitration, the parties go for private dispute resolution instead of taking the matter to a courtroom.

  • Arbitration is also known by another name which is Mediation.
  • Arbitration is a private procedure wherein the issue is kept private and confidential. Thus, it is a smart choice for businesses to resolve their disputes privately.
  • Unlike litigation, the arbitrator or third party is chosen mutually by both parties on the basis of expertise in a related field of law or industry.
  • Unless otherwise agreed, the third party or arbitrator’s decision will be final and binding on both the parties and can not be changed, except in specific circumstances.
  • The parties can not be compelled to participate in court proceedings unless they agree or the same is mentioned in the contract.
  • It is a much speedier process than litigation.
  • Arbitration is less expensive than litigation. The arbitration association and arbitrator’s charges are nominal and can be easily borne by both parties.

Conclusion-

There are numerous reasons to choose arbitration over litigation and vice-versa. Arbitration is preferred by the parties due to its quick settlement process. Arbitration is mostly preferred by businesses who want to keep their matters confidential and away from the general public. Also, It is a cost-effective process.

Although Litigation has a number of advantages too. The most important thing in the litigation process is that it becomes a part of the public record. It is preferred because numerous appeals can be made here. Another benefit of litigation is easy enforcement of the final outcome. However long it takes, you’ll eventually have a final result.

Many businesses outsource litigation and arbitration services because having litigation and arbitration advisors can help in overcoming complex legal obstacles. If you are struggling with any unresolved or pending dispute, it is the right time to hire our expert litigation and arbitration advisors. Our litigation and arbitration advisors will assist you throughout the dispute settlement process. Before suggesting the appropriate option for you, our litigation and arbitration advisors will review the details of your case and provide you with thorough, attentive, and competent grievance redressal to protect your organization and its assets throughout the process.