What does arbitration involve?

Arbitration involves a third-party judge, known as an arbitrator, who is tasked with making binding decisions on disputes between parties. In this process, the arbitrator reviews the evidence presented, listens to the arguments from both sides, and then issues a decision that is typically enforceable under law. This method is often preferred in construction contracts and business agreements because it provides a quicker and more cost-effective resolution compared to traditional litigation.

The binding nature of arbitration means that the parties involved agree to abide by the arbitrator’s decision, which separates it from other dispute resolution methods such as mediation or negotiation. Mediation involves a neutral party facilitating a discussion between the disputing parties but does not result in a binding decision. Similarly, negotiation is a process where parties attempt to reach an agreement without involving a third party to make a decision. Lastly, jury trials, while they involve a third party, are not characteristic of arbitration, as they are typically longer and more formal legal proceedings governed by court rules.