Arbitration and litigation are two primary methods for resolving legal disputes. Litigation takes place in public courts with judges and juries; arbitration uses private, neutral decision-makers (arbitrators).
14 steps across 2 sections
1. Arbitration
- Speed Average 11.6 months (AAA) vs. 24.2 months for court cases to reach trial
- Cost Generally lower than litigation (but can still be substantial)
- Privacy Proceedings are private and confidential
- Appeal Very limited — awards are rarely overturned
- Discovery Limited document exchange and depositions
- Decision-maker Arbitrator selected by the parties (often with industry expertise)
- Class actions Most arbitration clauses include class action waivers
2. Litigation
- Speed Typically 1-3 years to trial; can be longer with appeals
- Cost Higher due to extensive discovery, motions, and trial preparation
- Privacy Public record (filings, hearings, and verdicts)
- Appeal Full appellate rights
- Discovery Comprehensive depositions, interrogatories, and document production
- Decision-maker Judge or jury
- Precedent Court decisions create legal precedent; arbitration does not
Common Mistakes
- Not reading arbitration clauses in contracts before signing
- Assuming arbitration is always cheaper (complex arbitrations can be expensive)
- Not understanding that binding arbitration typically eliminates your right to...
- Ignoring the class action waiver in arbitration clauses
- Assuming you have no choice when faced with a mandatory arbitration clause (s...
Pro Tips
- Read arbitration clauses before signing any contract — negotiate them out if ...
- Some courts have struck down unconscionable arbitration clauses — consult an ...
- For consumer disputes under $10,000, small claims court may be an option even...
- The AAA has a Consumer Arbitration Rules that cap consumer filing fees at $200
- Check if your state has laws limiting mandatory arbitration in certain contex...