Arbitration is the most formal type of alternative dispute resolution. In arbitration, the disputing sides agree to bring their disagreement before a neutral third-party arbitrator. The arbitrator acts very much like a judge does in a court, presiding over the dispute and imposing decisions in much the same way a judge would impose a ruling or a judgement. In arbitration, each side is there to present their information and facts to the arbitrator, who is responsible for evaluating each sides position and making a ruling or decision.
The arbitration process involves rules and procedures, though these are usually less restrictive than the rules that govern the litigation process. Arbitration often allows both sides to come to an agreement about what kinds of rules will be used during the process or to decide how formal or informal they want to be in the process. In some instances, the parties can prepare and submit their information and supporting documents to the arbitrator prior to the arbitration.
Arbitration can be binding or non-binding. In non-binding arbitration, the arbitrator typically issues a ruling or recommendation that both sides are free to either adopt or reject. In binding arbitration, the arbitrators ruling ends the dispute in much the same way a judge’s ruling would. The parties decide on the confidentiality of the arbitrators decision.