Features of Litigation vs. Arbitration

Litigation

Arbitration

Public process

Private process

Any party can institute

Parties must agree to use

Adversarial procedure

May be less adversarial

Formal, inflexible

Less formal, more flexible

Statutory/Rule procedures govern

Simpler rules of procedures; evidence rules usually not strictly applied; parties may agree to modify

Broad discovery

Discovery typically limited to document production; interrogatories or depositions permitted depending on selected rules of procedure

Adjudicators are generalist judge/jury

Arbitrators may be party-selected experts

Adjudicators apply the law; their decision sets precedent

Arbitrators apply party-selected standards, (law, business standards or equity); failure to apply generally is not reversible error; decisions do not set precedent

Broad right of appeal

Grounds to vacate award limited to arbitrator's fraud, bias and the like

Remedies can include compensatory and punitive damages, injunctive relief

Arbitrators can grant compensatory damages and injunctive relief; preliminary injunctive relief may be difficult to obtain on an emergency basis; parties can limit arbitrator's authority to award certain damages

High transaction costs

Can reduce costs

Delay (docket)

Usually reduces delay to commencement of hearings; hearings may be intermittent depending on selected rules of procedure and arbitrators' schedules.