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Arbitration, a form of alternative dispute resolution (ADR), is a way of resolving disputes outside the courts. Litigation can be expensive, time-consuming and unpredictable.[1] With arbitration the parties to a dispute agree to have the disagreement decided by a neutral third party.[2] More often this is a panel of three arbitrators. Each party suggests one, then both arbitrators agree on a third arbitrator.[1] The decision is the result of a majority vote.[1]

Arbitration (hearing)

Arbitration includes an agreement in advance by both parties to comply with the decision of the arbitrator(s). The process includes a hearing in which both parties may be heard.[2] The arbitrator(s) reviews the evidence in the case and makes a decision. One that is legally binding on both sides and enforceable in the courts.[3]


Another form of alternative dispute resolution is mediation.[4] Mediation and arbitration both use neutral third parties. For that reason they are sometimes confused. One difference is that a mediator does not make any decisions. Instead the mediator works towards getting both parties to agree.[5] Unlike Arbitration, there is usually only one mediator. Another difference is that mediation is usually non-binding.[5] Mediation is used more often in smaller disputes or when the matter is kept confidential.[5] In some jurisdictions, mediation is required before a case can come to court.[1]


  1. 1.0 1.1 1.2 1.3 "Mediation vs. Arbitration vs. Litigation: What's the Difference?". FindLaw. Retrieved 22 October 2015. 
  2. 2.0 2.1 "Arbitration". The Free Dictionary/Farlex. Retrieved 22 October 2015. 
  3. Arthur Sullivan; Steven M. Sheffrin, Economics: Principles in action (Upper Saddle River, NJ: Pearson Prentice Hall, 2003), p. 324
  4. Information World Mediation WikiMediation
  5. 5.0 5.1 5.2 "Dispute Resolution". Diffen. Retrieved 22 October 2015. 

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