What is arbitration?

When you have a legal dispute with someone, there are at least two procedures for resolving the dispute:  File a lawsuit in the tax-payer funded court system or submit to binding arbitration.

My sense with the term “arbitration” is that people who don’t spend time working with the law, probably hear the term often but do not have a clear understanding of what it means and how it is different from a lawsuit in a court.  The American Arbitration Association, one of the largest administrators of arbitration proceedings, defines arbitration as “the out-of-court resolution of a dispute between parties to a contract, decided by an impartial third party (the arbitrator)—is faster and more cost effective than litigation.”

Below is a table that highlights some of the basic differences between a “court case” and an “arbitration.”  Both processes are used to resolve legal disputes between individuals and businesses.

  Court Case Arbitration
Who can find out about it Public Private
Who decides the winner Jury or Judge 1 or 3 arbitrators (usually attorneys) from a roster of neutral arbitrators
Selection of decision-maker Jury selected or elected judge makes decision parties select the arbitrator(s)
Where the case happens County Courthouse Private location arranged by the parties to the dispute
Length of the case 8 months to 2 years 5 months to 1 year
Punitive Damages Maybe Usually not available
Evidence allowed Relevant evidence per evidence code  Limited evidence
How it gets started File a Petition with the court File demand for arbitration
Winner entitled to attorney fees? Sometimes Usually
Costs court fees, attorney fees fees for arbitrator(s), attorney fees

Posted by Shawn Roberts

I write about and try to answer practical Oklahoma legal questions. I tend to focus on estate planning and business issues. I make a living as an attorney working for Resolution Legal Group in Oklahoma City. I am husband to Amy and the father of Sam and David. We live exactly in the path where the "wind comes sweeping down the plains."