To Resolve Various Legal Disputes Or Disagreements, Individuals And Businesses Also Have The Option Of Arbitration Or Litigation. Both Arbitration And Litigation Are Way Of Coming To A Resolution, Though With Different Approaches. When Arbitration Could Offer Certain Benefits, Including The Plus Points Of Speedy Resolutions And Cost Savings, It Is Necessary To Properly Mull Over The Potential Disadvantages Which Also Come With This Alternative Dispute Resolution Methods. In This Article, We Shall Discuss The Various Downsides Of Arbitration And Why The Option Of Litigation Must Not Be Ignored Altogether.
Limited Formal Discovery
One Of The Most Primary Disadvantages Of The Method Of Arbitration Is Its Limited Formal Discovery Process. Unlike The Process Of Litigation, Where The Parties To The Dispute Will Have An Opportunity To Gather Information By Way Of Depositions, Interrogatories, As Well As Requests For Documents, The Process Of Arbitration, Basically Has A More Streamlined Discovery Procedure. Such Lack Of Comprehensive Discovery Could Hinder The Ability Of A Party To Obtain Key Evidence Or Information Which Shall Be Required To Present A Strong Case.
Limited Decision-Making Power
For The Method Of Arbitration, Decision-Making Power Shall Rest Solely With The Arbitrators. Although Such Provision Could Be Seen As A Benefit In Terms Of Reducing The Complexity As Well As The Cost Of The Proceedings, It Would Also Mean That The Parties Would Be Constrained Due To The Arbitrator’s Expertise, Judgment, Or Any Potential Bias. As Opposed To The Setting Of The Courtroom, Where The Judge Or Jury Would Decide A Case, Arbitration Shall Limit The Input As Well As The Perspective Of Numerous Decision-Makers, Which Would Potentially Impact The Fairness Of The Outcome.
No Formal Precedent
Arbitration Rulings Shall Not Typically Establish A Formal Precedent. The Decisions Taken In An Arbitration Would Be Mostly Confidential,And Shall Not Be Binding On Future Cases, Thus, Would Not Create Any Legal Precedent Which The Parties Of A Future Arbitration Clause Could Rely Upon. This Limitation Could Make It Difficult For The Related Parties To Predict The Outcome Of Their Dispute On The Basis Of Any Prior Arbitration Award. On The Contrary, Litigation Decisions Could Create Legal Precedents Which Could Help Guide The Interpretation As Well As A Better Understanding Of The Laws, Which Shall Benefit The Future Litigants As Well As The Society As A Whole.
Limited Opportunities For Appeal
As An Arbitration Is Designed To Be A Final As Well As A Binding Process, Thus The Options For Appeal Are Significantly Restricted. Likelihood Of Overturning An Arbitration Award Could Be Understood As Basically Minimal To Non-Existent, Unless There Is A Situation Of Clear Evidence Of Misconduct Or The Arbitrator Has Committed A Serious Error. Such Lack Of Appeal Options Puts The Method Of Arbitration At A Disadvantage.
Limited Discovery Of The Background Of The Arbitrator
For The Method Of Arbitration, The Respective Parties To The Dispute Would Decide Over The Choice Of The Arbitrator(S). Though The Parties Do Have Some Control Over Such Selection Process, However, Certain Limitations Are There To The Ability Of The Parties To Investigate The Background Of An Arbitrator In A Thorough Manner. Unlike The Process Of Litigation, Where The Judges Could Be Appointed Or Elected, Arbitration Shall Rely Heavily Upon The Private Arbitration Panel Or Organizations. Parties To The Dispute Could Be Left With Limited Information In Order To Evaluate The Qualification Of The Arbitrator, His Expertise, Or The Potential Biases He May Have, Which Could Possibly Compromise The Neutrality Of The Entire Arbitration Process.
Cost Allocation
Contrary To Common Perception, The Process Of Arbitration Is Not Always A Cost-Effective Alternative To Litigation. While It Could Be True That The Process Of Arbitration Could Be Faster And Less Formal, Cost Allocation For The Methods Of Arbitration Could Still Be At A Disadvantage. In The Process Of Litigation, Court Fees As Well As The Procedural Costs Would In Most Scenarios Be Borne By The Losing Party, However In The Arbitration Method, Costs Would Typically Be Shared Between The Parties To The Dispute. Also, The Fees Which Are Charged By The Arbitrators Could Be Substantial, And The Parties May Have To Follow Through The Arbitration Process By Engaging In Legal Representation, Which Would Ultimately Add To The Overall Expenses.
Conclusion
Although The Arbitration Process Provides For Certain Advantages, Such As The Speed And Flexibility, It Is Necessary To Consider The Numerous Disadvantages Of The Arbitration Process As Well Before Going For It.
In Case You Have Any Doubts Regarding The Method You Shall Use To Resolve Your Dispute, It Is Advised That You Seek Legal Opinion From A Professional. Lead India Offers You A Team Of Experienced Advocates Who Have Been Successfully Assisting The Clients With Adr Issues As Well As Litigations. Thus, If You Wish To Seek Free Legal Advice Online Or Talk To A Lawyer, You May Contact Us.
