Generally speaking, it is always in a business’s best interest to avoid litigation if at all possible. However, if one does not litigate there are two main other choices to resolve legal disputes: mediation and arbitration.
Arbitration has some specific advantages over both litigation and mediation. According to FindLaw, arbitrating a dispute can help you save money and time while keeping the deliberations confidential and final.
How does arbitration save money and time?
Arbitration can save a lot of money, depending on the form of arbitration that the parties decide on. Particularly if the parties are okay with hiring one arbitrator rather than a panel of arbitrators, this is often much cheaper than going through the courts. (However, arbitration is not always cheaper than litigation, depending on the route that you and the other party decide to take with it.)
Arbitration naturally saves time because the arbitrators are not working judges with a full court load. Usually arbitration can begin right after the parties decide to pursue it. On the other hand, you may have to wait weeks or months for the courts to have time to hear your case.
How does arbitration protect confidentiality and finality?
One of the biggest advantages of arbitration is that since you are keeping your dispute out of court it is not part of the public record. Depending on the nuances of your particular case, confidentiality may be very important to you.
Additionally, arbitration is often binding. This is in contrast with mediation, which usually is not. The finality that arbitration offers can be extremely enticing depending on your needs.