Difference Between Litigation and Arbitration

In a world full of divergent views and opinions, disagreements and conflicts always arise. Measures have however been taken to curb these events between the parties involved. Although most contracts spell out ways in which these issues should be handled, others do not. Some of the methods used include arbitration, mediation, and litigation. While these two have similar objectives, they differ based on the process, time taken, costs and the people involved, just to name a few. It is important to understand these two conflict resolution methods as they are part of our everyday life.

What is Litigation?

This is a method of resolving conflicts that involves a legal proceeding in the courts of law. It ensures that the law is enforced between the conflicting parties. The process of litigation starts when a case is brought to the court. The appointed judge then gives his verdict on the case. This is after due consideration of all the facts, arguments and evidence presented. The decision of the court is definite. However, if the parties are dissatisfied with the court’s decision, they can appeal to a superior court of law.

Advantages of using litigation as a dispute resolotion method include;

• The final decision can be appealed and presented to a supreme court
• It is a fair process as none of the parties involved selects the judges
• It is a formal process and is recognizable by law
• Rules of evidence are allowed

However, disadvantages include;

• It is time-consuming
• It is not flexible as the process is controlled by procedural and statutory rules
• It is costly due to depositions of witnesses not to mention the pre-trial discovery process
• Litigators require high-level of expertise of the law profession
• Parties can appeal to decisions made which can make the process time consuming

What is Arbitration?

This is a dispute resolution method whereby an independent third party is used to resolve a disagreement between two parties. Common in employment contracts, this method is becoming increasingly popular all over the world. The arbitrator makes the final decision based on the evidence presented by the parties involved, a decision that is binding. Although most disputes are handled by one arbitrator, larger disputes may require two or more arbitrators.

Advantages of using arbitration as a dispute resolution method include;

• It is not time-consuming
• It is a flexible process
• The process is carried out in a private setting hence provides privacy against persons not involved in the process

However, disadvantages include;

• The final decision is binding and cannot be appealed
• The rule of evidence is not keenly looked at hence may disadvantage some parties

Similarities between Litigation and Arbitration

• Both are dispute resolution methods
• Both engage third parties in conflict resolution

Differences between Litigation and Arbitration

Definition

Litigation refers to a judicial method of resolving conflicts that involves a legal proceeding in the court of law. On the other hand, arbitration refers to a non- judicial dispute resolution method whereby an independent third party is used to resolve a disagreement between two parties.

Time

While litigation is time-consuming, arbitration provides a speedy dispute resolution process.

Flexibility

Litigation is not flexible as it is controlled by procedural and statutory rules. On the other hand, arbitration is flexible as the parties involved can decide on a flexible dispute resolution schedule.

Third-party

While the third party in litigation is a judge, the third party in the arbitration is an arbitrator.

Rights of appeal

In litigation, parties involved can appeal the court’s final decision to a supreme judge. On the contrary, parties in arbitration cannot appeal the final decision as its binding.

Expertise

While litigators are in the law profession, arbitrators are selected based on the capability to comprehend a case better hence can be from any profession.

Privacy

While the process of litigation is not private, the process of arbitration is private.

Location

Litigation takes place in a court of law while arbitration takes place in a venue mutually agreed by both parties.

Litigation vs. Arbitration: Comparison Table

Summary of Litigation vs. Arbitration

Litigation refers to a judicial method of resolving conflicts that involves a legal proceeding in the courts of law. The final decision is not binding hence parties involved can appeal to a supreme judge. Despite this, the process is not flexible as it is controlled by procedural and statutory rules. Also, the process is not private and may be costly. On the other hand, arbitration refers to a non- judicial dispute resolution method whereby an independent third party is used to resolve a disagreement between two parties. It is flexible as the parties involved can decide on a flexible dispute resolution schedule and is a private process not to mention the speedy dispute resolution process. However, parties involved cannot appeal the final decision as its binding. Despite the differences, these two remain important conflict resolution methods all over the world.

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