Pros and Cons of Non-Binding Arbitration

The costs associated with litigating a legal dispute continue to increase. For these reasons, many people are turning to alternative dispute resolution (ADR) methods such as mediation and arbitration instead of litigation. Moreover, many judges are ordering arbitration in an effort to relieve their backlog of court cases.

The Neutrals® help people throughout South Florida find peaceful resolutions to their legal disputes through non-binding arbitration. Also, an attorney at the firm can analyze the details and determine your options in regards to the best possible outcome.  

What Is Non-Binding Arbitration?

Arbitration is a process less formal than a jury trial but with the same goal of having someone neutral decide the outcome of a legal dispute. During arbitration, the feuding parties meet with the arbitrator, share information with the arbitrator who then decides how the dispute will be resolved. 

In binding arbitration, the parties agree to accept the decision of the arbitrator completely and fully. They forfeit any opportunity to have their case heard in court to be decided by a judge or jury. Instead, the parties are legally bound to the arbitrator’s decision.

What happens at non-binding arbitration is that the parties are not legally bound to the arbitrator’s decision. If either party is dissatisfied with the decision, they can choose to go to trial, hoping to end up with a more favorable verdict than the arbitrator’s award. 

If neither party is required to live with the arbitrator’s decision, you may be wondering, when is non-binding arbitration used? It is often used by parties who have been unable to reach an agreement on their own, are too far apart to benefit from meditation, but who believe they may be able to resolve their differences if they have the guidance of an arbitrator. The result of many non-binding arbitration awards is that the parties have an agreement they can use to craft a legally enforceable contract based on the arbitrator’s decision. 

What Are the Pros of Non-Binding Arbitration? 

Arbitration in general takes less time than filing a court case and working through the litigation process. The process and outcomes are confidential rather than a matter of public record. Moreover, the cost of arbitration versus litigation is usually substantially lower.  

Non-binding arbitration is also subject to strict guidelines and principles as set forth in the American Arbitration Association’s Non-Binding Arbitration Rules. These rules aim to streamline the dispute resolution process while ensuring the arbitrator’s decision treats both parties fairly but remains non-binding. They provide guidance regarding the arbitrator’s role and limitations, such as their inability to sanction either party. 

Another advantage of non-binding arbitration is the process’s inherent ability to strengthen working relationships between the parties. The neutral arbitrator helps each side see the strengths and weaknesses in their cases. That, in turn, may make them more willing to compromise. Instead of heated court testimony and rebuttals before an unpredictable jury, parties air their differences in front of an arbitrator attorney who uses the law to guide them. 

What Are the Cons of Non-Binding Arbitration?

The major disadvantage of non-binding arbitration is that the award is, indeed, non-binding. A party that doesn’t like the arbitrator’s award can walk away and file a civil action. That means the dispute will never be fully resolved until the jury reaches a verdict and the parties have exhausted all their options. Moreover, both parties will be able to use information they learned during arbitration as evidence during litigation. 

Non-binding arbitration can be misused by a party as a stalling tactic. That party may want more time to benefit from the points of disagreement or to gather and prepare their case for court. A party may also attempt to delay the outcome of non-binding arbitration by stalling the proceedings if it benefits them to do so.

Remember, non-binding arbitration is voluntary, so parties have some latitude in their ability to stall. However, experienced arbitrators, like The Neutrals®, will recognize delay tactics and attempt to keep the process on schedule. After all, one of the reasons to enter non-binding arbitration is to streamline the dispute resolution process. Keeping arbitration on track is the arbitrator’s job. 

How a Trusted Attorney Can Assist You

If you want to know how to prepare for non-binding arbitration, begin by consulting with arbitrator attorneys you can trust, like The Neutrals®. They can discuss the process in detail so you can determine if non-binding arbitration offers the best potential for resolving your dispute.  

If you agree to non-binding arbitration, you and the other party will need to agree on who you hire to arbitrate your case. If you are in South Florida, The Neutrals® are here to help. Call the office now to find out what comes next.