Posted by / Tuesday 9 August 2016 / No comments

The advantages and disadvantages of Arbitration

Reconciler Ombudsman Conciliator Litigatio

Arbitration is another way of settling disputes without using the traditional court system. The parties to the dispute accept that a third party goes into the case and come out with a ruling they are both willing to accept.

Less formal
The usual formality that characterizes the traditional courts is absent when the case is being handled through arbitration. In other words, the rules of engagement are a little more relaxed than if it was in a court premise. 

It is less expensive
Unlike in the traditional court system where a complainant and defendant have to have lawyers to represent them in court, with its attendant costs, arbitration procedure does not involve that much cost. It is therefore argued that arbitration is less expensive.

Reduces workload on the traditional court
The absence of arbitration would have meant that all those cases would have ended in the traditional courts. Already, the courts are choked with a lot of on-going cases and they are finding it difficult to deal with. Arbitration, therefore, reduces the number of cases that would have ended in court, thereby reducing the workload of the traditional courts.

Arbitration is faster
Resolving disputes in the traditional court can be long and winding to the extent where some of the parties to the dispute decide not to litigate the matter anymore. In the case of arbitration, the arbitrator can use a few hours or days to resolve the matter. It is therefore concluded that the system of arbitration is faster than the use of the traditional courts.

There are more privacy and confidentiality
in the course of arbitration, the procedure is removed from public eyes, therefore, the parties can be assured some privacy and secrecy. This may be due to the fact that journalists are not allowed in the hearing and unless permitted by the disputing parties, the case could not be reported in the media. This ensures that parties to the dispute are not ridiculed.

Parties choose experts in the field as arbitrator
The system allows for the choice of an expert to deal with their case. The arbitrator, who is well versed in the area of the subject matter where the dispute is, gets the opportunity to handle the case and the parties because he or she understands the terrain.

Right of appeal is limited
After an arbitrator has come out with his/her ruling and a party does not agree with that arbitrator’s decision, his or her right to appeal are limited. This is unlike the traditional courts.

It may be just as expensive
The arbitration procedure is very similar to court procedure and can, therefore, be just as costly and time-consuming like the normal litigation.

Powers of arbitrator limited
While arbitration can be a good alternative dispute mechanism, the powers of the arbitrator are more limited than that of the courts. 

Disputing parties pay the cost of arbitration
The parties in the dispute, in some cases, pay the cost of the arbitration and the hiring of the venue but in cases of litigation, the disputing parties do not incur such costs. If people go to court, they do not pay the cost of getting a judge to sit on the matter.

1. a. What is arbitration?
     b. Highlight five advantages of arbitration as a means of settling disputes.

2. Highlight three advantages and three disadvantages of arbitration.

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