Understanding the Difference between Arbitration and Litigation

What comes to your mind when you hear the word “legal dispute”? If you are like most people, there is a great chance that you think about time-consuming court cases that are not only expensive and stressful. Besides, most lengthy court proceedings don’t have a satisfactory result,

In contrast to litigation in court, you can also avail yourself of the Arbitration Association, which doesn’t cause you to negotiate your matter in court. Arbitration offers the parties that are in a conflict an entirely different approach to solving their dispute and finding a different approach to resolve their differences.

That said, if you have an ongoing legal dispute, you will want to explore your potential options for resolving your dispute with an arbitration or litigation team.

Let us cover the basics for both approaches:

What Exactly is Arbitration?

To understand how both processes work, let us explore what arbitration is about and how this process works. Arbitration refers to a legal way of ADR, also known as “Alternative Dispute Resolution.”

Basically, arbitration refers to the process of getting your legal disputes resolved outside the court. Three parties are part of an arbitration:

• The Claimant, who is the person making a claim against the accused party.
• The Respondent, who is the accused party.
• The Arbitrator, who is the third party, assesses the evidence and determines the outcome.

The goal of arbitration is to get a fair outcome through an unbiased tribunal while refraining from extra expense and delay. The final verdict stated by the third party is known as the award. Usually, it is impossible to appeal the award of an arbitration.

What Exactly is Litigation?

Now that you know the basics of arbitration, you will want to understand the basics of litigation so that you can understand how arbitration differs from litigation. Typically, a litigation case involves a situation where one party takes legal action against another party,

Litigation is the default way of resolving disputes in many states and countries. Nonetheless, litigation is typically referred to as the last resort because the conflicting parties are usually required to consider an “Alternative Dispute Resolution” before they turn to legal proceedings in court.

The specific set of rules used to resolve a litigation case is known as the Civil Procedure Rules, which are essentially designed to ensure the following aspects:

• The conflicting parties are dealt with equally.
• Save potential costs.
• Deals only with things that are specific to the respective dispute.
• Requires only a specific quantity of the resources of the respective court where the litigation case is being resolved.
• The conflicting parties are required to explore arbitration before proceeding to litigation.

The Takeaway

Now that you know the differences between litigation and arbitration, you will want to know that before heading to litigation, you must opt for pre-action protocols exclusively designed to encourage the conflicting parties to reach an agreement outside the court.

The pre-action protocols are exclusively designed to enable both parties to comprehend each other’s positions and then take suitable steps regarding how they would like to proceed.