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Advantages and Disadvantages of Arbitration by Mind Map: Advantages and Disadvantages of Arbitration
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Advantages and Disadvantages of Arbitration

Comparison with Litigation

Pros and Cons of Arbitration Compared With Litigation Pros Cons Informal arbitration is less time consuming, less expensive, and easier to handle Informal arbitration may create due process problems Arbitrator may not be limited by “cause of action” perspective and narrow remedy options Arbitration may be imposed on consumers or persons with limited bargaining power which violates constitutional right to a civil trial by jury Some types of arbitration act as precedent Some arbitrator’s decision are arbitrary; limited appealability may lead to a bad outcome Useful when there are choice-of-law or choice-of-forum issues Most arbitration does not result in the creation of legal precedent If litigants want adjudication, arbitration takes less time than waiting for a trial Arbitrator may contribute to the exploitation of a weak disputant, particularly when arbitration is made in contracts of adhesion Not reviewable to the same extent as litigation Because arbitration is private, it is easier for bigoted disputants and arbitrators to act on their prejudices Can choose an adjudicator with a specific background and expertise Formalized arbitration designed to protect due process rights can be as expensive, time consuming, and complex as litigation If the arbitration agreement is voluntary and procedurally just, disputants are more likely to take psychological ownership of the results

Comparison with Negotiation

Pros and Cons of Arbitration Compared With Negotiation Pros Cons Effective when the principal source of the conflict is a different perception about the facts of law More harmful to relationships More final if a final decision is definitely rendered Disputants must surrender control over the outcome to a third party Because the decision is rendered by a third party, loss-of-face problems in making concessions are avoided Less likely to generate creative, optimal solutions More expensive and time consuming Rules of reviewability, choice of law, and arbitrability are highly complex; results are often counterintuitive and/or hard to predict; more likely to be vulnerable to legal maneuvering

Comparison with Mediation

Pros and Cons of Arbitration Compared With Mediation Pros Cons Effective when the principal source of the conflict is a differing perception about facts or law; however, skilled mediators can deal effectively with this issue. More harmful to relationships More final if a final decision is definitely rendered Disputants must surrender control over the outcome to a third party Because the decision is rendered by a third party, loss-of-face problems in making concessions are avoided; however, mediators are often skilled at dealing with such impediments Less likely to generate creative, optimal solutions More like to impair due process rights because the outcome is binding Formal arbitration is more expensive and time consuming Rules of reviewability, choice of law, and arbitrability are highly complex; results are often counterintuitive and/or hard to predict; more likely to be vulnerable to legal maneuvering