Advantages And Disadvantages Of Arbitration

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1. HISTORY: We have been dealing with ADR throughout history, though maybe not with the same name, but with the same characteristics of dispute settling. It can be traced back from the period of the Renaissance, when Catholic Popes acted as arbiters in conflicts between European countries. Also, kings used these types of aids as an extension of their own authority. They would accept the decision made by a third party, typically made by a local, highly respected person, which acted as an arbiter in a dispute between two parties; thus, creating one of the first forms of arbitration. In some sense, then, common law ADR has been around for centuries. In the United States, commercial arbitration existed in the early Dutch and British colonial…show more content…
Disadvantages of arbitration: • Arbitration may be subject to pressures from powerful law firms representing the stronger and wealthier party. • If arbitration is mandatory and binding, both parties renounce their rights to go to court, having a judge or jury decide the case if not satisfied with arbitration. • In some arbitration agreements, parties have to pay for arbitrators, which add to legal costs that may be hard of reach, especially in small consumer disputes. • There are very limited avenues for appeal, which means that an erroneous decision cannot be easily overturned • When there are multiple arbiters on a long case, trying to manage a schedule for a hearing date might lead to a delay in arbitration. • Rule of applicable law is not necessarily binding on the arbitrators, although they cannot disregard the law Arbitration agreements are generally divided into two types: 1) Agreements which provide that, if a dispute should arise, it will be resolved by arbitration. These will generally be normal contracts, but they contain an arbitration
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