In a previous lesson, you learned that arbitration is one of the many conflict resolution methods. Like mediation, the arbitration process has several variants.
This lesson will provide a more in-depth focus on the following:
Arbitration is a conflict resolution process taking place outside of courts in which a neutral party decides the outcome of a dispute between two or more parties.
This decision is called an award, and it is legally binding and enforceable. If the neutral party deciding the award is just one person, this person is called an arbiter. If the decision-maker is several people, this group is referred to as an arbitration tribunal.
The arbiter or arbitration tribunal may be legal professionals, but this is not a requirement. They also don’t necessarily have to be experts on the topic of the dispute.
A number of businesses, particularly in the United States, find that they like to use arbitration as a method of resolving conflicts.
For one, even if the dispute is very technical, the arbiter doesn't necessarily have to be technical. You can't choose an arbiter for his/her technical knowledge any more than you could choose a judge in a court system.
Businesses also tend to favor arbitration over the courts because arbitration is:
However, there have been some issues raised around the use of arbitration, such as with credit card companies that include arbitration as part of the transaction.
Difficulties can also arise in instances where one of the parties involved in the dispute learns that:
In this lesson, you learned about arbitration as a conflict resolution process that takes place outside of the courts and involves either a single arbiter or a group of arbiters called an arbitration tribunal.
You now understand what arbitration looks like in action, and that while arbitration is often faster and cheaper than the court system, issues can arise when there is the suggestion of bias or additional requirements surrounding the process.
Source: Adapted from Sophia tutorial by Marlene Johnson.
A conflict resolution process in which a neutral party decides the outcome of a dispute between two or more parties.
The conflict resolver involved in an arbitration.
A group of arbiters working together in an arbitration.
The decision of an arbiter or arbitration tribunal in an arbitration.