What does arbitration involve?

Arbitration involves resolving disputes through a process where a neutral third party, known as an arbitrator, makes a binding decision after hearing arguments and evidence from both sides. This method is often chosen as an alternative to court proceedings as it can be more efficient, cost-effective, and less formal.

In arbitration, the parties typically agree to abide by the arbitrator's decision, which can provide a clearer outcome and closure, contrasting with collaborative negotiation processes that rely on mutual agreement and dialogue rather than a binding decision. Additionally, the formal nature of court proceedings is distinct from arbitration, as the latter is usually conducted in a less rigid environment. Informal discussions between parties are not binding and lack the structured process of arbitration. Therefore, the essence of arbitration lies in its reliance on an impartial third party to resolve disputes definitively.