Arbitration Versus Lawsuit: How Are They Similar or Different

Most people are confused about the difference and similarity of arbitration and lawsuit. These terms seem to be very unfriendly, but these two have something to do with the law. As ordinary citizens, we sometimes fail to understand basic laws and legalities, which make us ignorant of the law. Being unaware of the law excuses no one as they say.

Let’s imagine a scenario. You are not paid well; you broke a bone while on duty and never had proper treatment. Can you sue your company? Is it possible to sue someone yet avoid a lengthy and expensive process? Can you reach a settlement that will be fair for both parties?

Arbitration: What It’s About

Arbitration is defined to be an alternative method of dispute resolution. It is used to settle an argument between two parties outside the court. Meaning, this is a much friendlier deal than a courtroom settlement. On arbitration, people of both parties come together to agree and follow a particular decision from an arbitrator. The arbitrator should be an attorney at law that has the expertise to the field of the case. And the arbitrator’s decision is going to bind both parties and help them reach an agreement legally.

It is usually called a businessman’s method in resolving disputes, but the state and the federal law still govern it. Usually, almost all start with civil provisions in the civil practice of the rules of arbitration. Arbitration is considered a private settlement, hoping to make both parties reach an agreement outside of the court. This is why arbitration is also called a private judicial determination.

Arbitration Process: What Happens in an Arbitration Hearing

An arbitration hearing is consisting of tribunal arbitrators that are traditionally odd in numbers to avoid even or tie voting.  Arbitration has simple principles to follow.  First, the arbitration objective is to obtain a fair solution of disputes without any expense or delay. Second, both parties in dispute should freely agree to how disputes are being resolved. Third, the court must not interfere. There are three types of arbitration, commercial arbitration, consumer arbitration, and labor arbitration. Commercial arbitration is for the disputes of commercial enterprise. Consumer arbitration is for goods and services, and/or consumer supplier disputes. Labor arbitration is for employee and employer disputes.

Lawsuit: What It’s About

It is a legal action for a dispute brought to the court for adjudication. This means that a dispute between two parties, whether people or organizations, is brought to a court of law for a fair and legal decision. So typically this consists of one party suing another party whether individual or group that needs a legal action whether it is about business, private individuals or government agencies.

Lawsuit Process: What Happens in a Lawsuit

The suing party is called the plaintiff and the party who has been sued is called the defendant. The hearing for a lawsuit normally takes place in a courtroom and may have a judge for the jurisdiction. Unlike arbitration, a lawsuit is more formal and also an expensive process. You do need a lawyer to represent you. Hearing is usually scheduled, and the process could be lengthy, which can take up to 30 days. There are many kinds of lawsuits like civil cases, criminal cases, enforcement cases, and estate administration cases, to name a few.

Arbitration VS Lawsuit

There is a fine line between lawsuit and arbitration. Arbitrations settlement is more amicable, doesn’t require a jury, short and fast, and it can be settled outside the courtroom. The lawsuit, on the other hand, is intimidating. It is also expensive for you since you will need a lawyer, and is a lengthy process due to a scheduled court proceeding. It can also be exhausting for both parties.

The choice between lawsuit and arbitration will depend on what case you or your party is facing. It doesn’t matter whether you are the plaintiff or the defendant. The main purpose is to reach a settlement that will be beneficial to both parties. The legal binding or mediation do not assure the plaintiff or complainant to pursue court proceeding. Nevertheless, the goal of these legal actions is to be fair to both parties. Also, to hear each side in line with the government and federal law.