{"id":357641,"date":"2016-04-04T10:41:50","date_gmt":"2016-04-04T15:41:50","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/adr\/arbitration\/arbitration-pros-and-cons.html"},"modified":"2026-06-24T11:27:00","modified_gmt":"2026-06-24T16:27:00","slug":"arbitration-pros-and-cons","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/adr\/arbitration\/arbitration-pros-and-cons.html","title":{"rendered":"The Pros and Cons of Arbitration"},"content":{"rendered":"\n
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The Pros and Cons of Arbitration<\/h1>\n\n
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\n By Lark Lewis, J.D.<\/a> | Legally reviewed by John Mascolo, Esq.<\/a>\n | Last updated\n
\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
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This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n\n\n

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Key Takeaways<\/h2>\n

Arbitration<\/span> offers faster timelines, more privacy, and a streamlined process, but it isn\u2019t always a better choice than court. Its finality can be a benefit when parties want closure, yet it also means there\u2019s little room to appeal an unfair outcome. It\u2019s important to weigh these pros and cons carefully, especially when arbitration<\/span> is required by a contract rather than chosen voluntarily.<\/p>\n\n <\/div>\n <\/div>\n<\/div>\n\n\n

Deciding how best to pursue a legal claim can be challenging. It makes sense to weigh the pros and cons of each path you might take. One common form of alternative dispute resolution<\/span><\/a> (ADR<\/span>) is\u00a0arbitration<\/span>. During arbitration<\/span>, the parties submit a dispute to a\u00a0neutral third party<\/span>, who makes a binding decision<\/span> on the matter.\u00a0<\/p>\n

Because an arbitrator<\/span>\u2019s decision is generally final, it\u2019s essential to weigh your options before agreeing to arbitrate a dispute. You will want to assess the advantages and disadvantages carefully. An ADR<\/span> attorney<\/a> can help you understand how arbitration<\/span> may work in your situation. Professional legal help can be crucial in choosing the most effective, practical way to resolve your legal matter.<\/p>\n

This article shares the advantages and disadvantages of <\/span>arbitration<\/span>. You\u2019ll learn about both positive and negative aspects of arbitration<\/span>, and how each party\u2019s perspective may shape whether arbitration<\/span> feels like the best choice for the legal issue.<\/p>\n

What Is Arbitration<\/span>?<\/h2>\n

Arbitration<\/span> is a legal pathway for alternative dispute resolution<\/span> (ADR<\/span>). It allows parties to avoid the expense and risk of a lawsuit<\/a> by attempting to reach an agreement outside of court. Arbitration<\/span> is always voluntary, though the agreement to submit to\u00a0arbitration<\/span>\u00a0(through an\u00a0arbitration<\/span> agreement<\/span>) may be made in advance of the issue. For example, many written contracts include a clause requiring the parties to submit to\u00a0arbitration<\/span>\u00a0rather than go to court if a dispute arises.<\/p>\n

Arbitration<\/span> can take a number of different forms. But in general, it involves one party delivering the other a notice outlining their dispute and expressing the intent to seek arbitration<\/span><\/a>. In most jurisdictions, there is time given for a response, followed by the selection of\u00a0arbitrators<\/span>\u00a0and a hearing. If the arbitration<\/span> occurs as the result of a contract, the rules, timeline, and venue may all be predetermined by the agreement.<\/p>\n

Advantages of Arbitration<\/span><\/h2>\n

Arbitration<\/span> has various advantages over a lawsuit in the court system<\/span><\/a>. Below are many of the perceived benefits.<\/p>\n

Cost<\/h3>\n

Arbitration<\/span> is often, on average, a cheaper way to resolve disputes when compared to court proceedings. Attorney fees<\/span> may rise in court litigation which provides for more pretrial hearings and disputes over discovery<\/a>. However, this isn\u2019t always the case, as described in the following section<\/a>.<\/p>\n

Speed<\/h3>\n

With some exceptions, arbitrations<\/span> follow more specific and defined timelines for resolving a dispute. Arbitrators<\/span>, unlike judges with crowded dockets, can serve as focused decision-makers. This often results in quicker final decisions.<\/p>\n

Fair and Impartial<\/span><\/h3>\n

Arbitrators<\/span> are commonly selected by agreement of both parties. This may occur via a third-party arbitration<\/span> service or through an outlined method involving input from both parties. This means that in many cases, no single party controls who the arbitrator<\/span> (or arbitrators<\/span>) will be.<\/p>\n

Finality<\/h3>\n

For the most part, it\u2019s difficult to appeal arbitration<\/span> rulings. This is true even if an arbitrator<\/span> has made some mistakes. This finality can be a positive factor in resolving a dispute<\/a>, one way or another, allowing the parties to move on.<\/p>\n

Simplified Procedures<\/h3>\n

Litigation can involve extensive paperwork, multiple hearings,\u00a0depositions<\/span><\/a>,\u00a0subpoenas<\/a>, and related processes. Arbitration<\/span> may eliminate some or many of those time-consuming and expensive parts of the discovery process. For example, simplified rules of evidence<\/span> will apply in arbitration<\/span> proceedings.<\/p>\n

Confidential<\/span><\/h3>\n

Arbitration<\/span> hearings<\/span> don\u2019t occur in open court and\u00a0transcripts\u00a0aren\u2019t part of the public record<\/span>. This confidentiality<\/span> can be very valuable for parties seeking to maintain privacy.<\/p>\n

Disadvantages of Arbitration<\/span><\/h2>\n

Now that you\u2019ve learned about some of the advantages of arbitration<\/span>, it\u2019s also essential to consider its possible disadvantages.<\/p>\n

<\/a>Not Always Cost-Effective<\/span><\/h3>\n

While cost was listed as a “pro,” it can also be a “con.” That\u2019s because arbitration<\/span> doesn\u2019t always reduce the cost of resolving a legal problem<\/a>. Arbitrations<\/span> can vary in complexity and can take many forms. Some types of arbitration<\/span> are more likely to increase the costs of dispute resolution than litigation.<\/p>\n

As one example, arbitrations<\/span> can be binding or non-binding. In\u00a0non-<\/span>binding\u00a0<\/span>arbitration<\/span>, the decision or award in the case isn\u2019t final. That means the parties are free to take their issue into court litigation. As a result, a party might face costs from arbitration<\/span>, including the arbitrator<\/span>\u2019s fee<\/span>, and then more costs if a party still proceeds to litigation<\/a>.<\/p>\n

May Favors Companies<\/h3>\n

Consumers<\/a> may have legitimate concerns about the fairness of being dragged into arbitration<\/span> over a minor issue the parties could resolve in\u00a0small claims court<\/a>. Also, companies favoring arbitration<\/span> may be more familiar with specific arbitrators<\/span> and the process in general.<\/p>\n

Not Always Faster<\/h3>\n

Just like they aren\u2019t always cheaper, arbitrations<\/span> aren\u2019t always faster than litigation. This is more likely the case when there are multiple parties, multiple arbitrators<\/span>, and complicated legal disputes.<\/p>\n

Location<\/h3>\n

In the small print of a\u00a0contract<\/a>\u00a0or mandatory <\/span>arbitration<\/span> clause<\/span> requiring consumers to arbitrate their issues, there may be language specifying\u00a0where\u00a0an arbitration<\/span> will occur. This location can sometimes be inconvenient to the average consumer, as it could\u00a0be in another state. This raises the cost and may require time off from work.<\/p>\n

Difficult To Appeal<\/h3>\n

As noted above, the right to appeal<\/span> arbitration<\/span> awards<\/span> is very limited. Although less common, this can sometimes result in what may be seen as an unfair result. There may be only a small chance that a court can step in to correct the outcome.<\/p>\n

No Jury<\/h3>\n

Arbitration<\/span> does away with juries entirely, leaving matters in the hands of an arbitrator<\/span>. The arbitrator<\/span> essentially plays the role of both judge and jury<\/a>.<\/p>\n

Considering Arbitration<\/span>? Make the Right Choice With a Lawyer\u2019s Help<\/h2>\n

Sorting through the pros and cons of arbitration<\/span> on your own may not answer all your questions. Getting legal advice from an experienced attorney can help you make the decision that\u2019s right for you. A lawyer can help you understand arbitration<\/span> clauses<\/span> and explain the timelines for both court and arbitration<\/span> proceedings.<\/p>\n

FindLaw\u2019s directory of\u00a0ADR<\/span> attorneys<\/a> can get you started. Enter your city or ZIP code for a list of qualified legal professionals near you. Because state law is relevant, your attorney should be licensed in your state. Your search results will also include important details about prospective lawyers, like ratings and whether they offer free consultations.<\/p>\n\n\n

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