Litigation and arbitration are two common routes you can take to resolve a legal dispute. They have some similarities, especially as both options aim to settle and resolve a dispute or disagreement, but the processes themselves, as well as the cost, speed and privacy of each method, are different. Here’s our handy guide to help you determine which method is best for you.
What is Litigation?
Litigation is a traditional route through the courts which involves presenting your case before a judge and following the court’s formal rules around evidence and procedure. The judge will decide on the way forward to resolve the dispute, and the outcome of litigation is legally binding – although there are appeal options that can be explored.
Litigation Benefits
The benefits of litigation include the ability to appeal a decision that’s not favourable. Litigation is also a clear, structured and public legal process, and it’s especially helpful if you need the powers of the court to take action – for example, by freezing assets or making an order.
Litigation Downsides
The downside to litigation is it can be expensive, although litigation funding, available from companies such as //www.novo-modo.co.uk/litigation-funding, is becoming a popular option to help litigants manage costs. Litigation is also quite time-consuming with a lot of formalities – and there can be delays.
What Is Arbitration?
This is a private form of dispute resolution. What happens is that both parties agree to appoint an independent arbitrator or panel who will then decide the outcome of the dispute. It’s especially useful when the parties would like a dispute to remain confidential, such as a dispute around commercial contracts, for example.
Arbitration Benefits
Arbitration is private and confidential and often speedier than litigation in many cases. It’s a less formal method, and parties retain a little control as they’re able to choose an expert arbitrator. It’s also internationally recognised.
Arbitration Downsides
The biggest downside is there’s limited right to appeal – meaning the decision is usually final. It can also be costly and less helpful if one party is refusing to be cooperative.