Advantages and Drawbacks of a Litigation Process – In Comparison With Arbitration

By: Robert Bell | Posted: 13th April 2010

Litigation law usually relates to the entire process of filing a lawsuit at a court, investigation and motion practice, trials, judgments or the final verdict and awards of damages. Litigation is always considered to be faster, cheaper and better than an arbitration process.

Time Period of the Processes:

If the litigation process is faster than the arbitration process, it largely depends on the court system where the case is fought. At a court where the usual time taken to dispose of a case is somewhere around two to three years, the litigation process will be slow and may take time. But at some courts which practices "rocket docket", the litigation process will be fairly smooth and faster.

Some of the practical factors that impact and slow down arbitration include its processes. Mostly an arbitration process is much similar to that of the litigation process. A major part of the discovery phase of a litigation process is included in the arbitration procedure. A full document exchange is considered and even depositions are common in arbitrations. Much similar to a litigation process witness of experts of the field are also accepted.

The next factor that lengthens the procedure of arbitration is the full hearing that is made mandatory. Most of the cases that are not settled have to go through the full hearing process. The third factor that impacts arbitration is the relaxed evidentiary standard. This extends the proceedings as the parties are free to produce evidence at any time.

All these three factors make a litigation process fairly faster than an arbitration process.

Cost of a Litigation Process:

Previously it was argued that the arbitration process is cheaper than that of a litigation process. This was due to the belief that the arbitration process needs less discovery and the hearing was conducted more quickly. But in recent times arbitration process is held similar to that of a court proceeding form and this, increases the time of the arbitration process.

And there are costs associated with arbitration that are not incurred in a litigation process. In an arbitration process, the party may need to pay a substantial amount of administration fees. This is mandatory in the U.S. as per the default arbitration clause of American Arbitration Association or the ICC. Also the parties are required to pay fees to the arbitrators which are not needed in a litigation process. Arbitrators not only charge for the hearing but also for the time spent on studying the brief and for the time taken to prepare for the case. In litigation, the bill is footed by the taxpayers and not by the involved parties.

In many cases, business people do not believe that the decision made by six to twelve randomly selected citizens can be taken as an ultimate decision. Unlike the process of litigation, arbitration involves lawyers and retired judges with clear understanding of the legal procedures and the issues associated with the case. This is considered as the only drawback of the litigation process.Jane Cooper writes about Houston business attorney related topics and coporate lawyer Houston subjects.
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