What is Arbitration and is it Right for Me?

Arbitration, in essence, is mediated dispute resolution, and is the alternative to litigation, or cases being tried in court. It is a private, judicial process to settle a dispute that is initiated and run by an independent third party. In arbitration, the parties who are in a dispute hand over the decision of resolving the dispute to the arbitrator or arbitrators.  In any arbitration circumstance, there might be either an individual arbitrator or a tribunal of arbitrators, but most states require that there be an odd number in order to avoid a tie in the resolution decision.
Arbitration is binding, which means that by law, the decisions reached by the arbitrator(s) must be accepted and followed by the parties in dispute.  Since the purpose of arbitration is to reach a fair resolution, the arbitrator(s) will serve as an impartial third party that will be as unbiased as possible in reaching a just decision.
Arbitrators are determined in one of several ways:
1.) the disputing parties will mutually agree upon the person or persons who will serve as arbitrators
2.) the disputing parties will choose one person as arbitrator and that person will, in turn, choose the other members of the tribunal
3.) the court will decide who will serve as arbitrators.
Arbitration is guided by both state and federal laws and most states have rules regarding how the process is to be conducted.  There is a Uniform Arbitration Act that has been adopted by many states, but some states still prefer to set out their own rules for arbitration.  Parties involved in an arbitrated dispute can be commercial or private in nature, and collective arbitration (also known as Rights Arbitration) is a common practice in dealing with grievance procedures.
The advantages of arbitration vs. litigation are numerous, not the least of which is lowered cost. Arbitration might be a good choice for you if you want a binding resolution to a dispute, but don’t want to go through the often costly and stressful process of litigation.