What you need to know about the differences between arbitration and litigation

| Nov 16, 2020 | Business Litigation |

Most Florida business owners find themselves either needing to sign or draft contracts as they operate their companies. Many of those agreements outline the procedure one must go through to resolve their differences. The contract may describe alternative dispute resolution or arbitration in this section.

Disputing parties generally have two options for resolving their differences; litigation or arbitration.  The former involves attorneys arguing cases in court in front of a judge and sometimes a jury.  The latter involves arguing in front of an unbiased third person who is tasked with deciding the outcome of the case.

Whether a party pursues litigation or arbitration comes down to the type of case they are facing. Parties can resolve civil matters via either approach but must use litigation for criminal issues. Rules of evidence apply to legal matters tried in a courtroom. Arbitration involves a limited evidentiary process.

One reason why disputing parties appreciate the arbitration process is that one or both of them can have a role in selecting their arbitrator. You have very little input when it comes to which judge decides your case when you pursue litigation. Court decisions are also generally appealable, whereas arbitrated ones are not.

The setting for arbitration is relatively informal, whereas court proceedings are the complete opposite. You don’t have to use attorneys as part of the arbitration process. A Florida judge may urge you to do so if you express an interest in representing yourself in court, though.

It’s often quicker to schedule an arbitration than to wait for a judge to find a spot on their calendar to schedule a hearing. There are a lot of fees associated with litigating a case, including attorney and court ones. You only have to pay for the arbitrator’s time when you pursue arbitration.

Arbitration clauses have become mainstays in contracts in recent years. These often require disputing parties to pursue this dispute resolution option before you take your case to court.  An attorney can review your Florida contract to determine whether it requires you to pursue arbitration, and if so, advise you on how to best protect your interests. Your West Palm Beach lawyer can also let you know when it’s best to pursue litigation.