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Disadvantages of Arbitration?
Arbitration can be a simpler, faster, more peaceful, and less expensive option than
litigation.3 min read
What are the advantages and disadvantages of arbitration? Arbitration can be a simpler,
faster, more peaceful, and less expensive option than litigation. However, the process is not
subject to the same rules of evidence and discovery as a court case. This can raise
questions of fairness and transparency.
What Is Arbitration?
Arbitration involves settling a legal dispute without going to trial. Going to trial can be
expensive and time-consuming, meaning arbitration can be advantageous to many people.
During arbitration, a third party listens to both sides of a legal disagreement. With the
documents provided and the oral statements of each person involved, the arbitrator will
issue a resolution. Witnesses will sometimes be called in to provide an oral statement.
Arbitration can be a great way to avoid legal costs, but careful consideration is required to
determine whether or not arbitration is useful for a specific legal case.
Types of Arbitration
Arbitration is most commonly used in the following scenarios:
Labor disputes
Business/consumer disputes
Family law matters
Once an arbitrator has made their decision, the legal outcome is final and cannot be
appealed. Many contracts have a specific arbitration clause, meaning that arbitration is a
requirement.
Advantages of Arbitration
There are many advantages to arbitration:
Fast-Track Arbitration
Once an arbitrator is chosen, they will select the date, time, and location of the arbitration. A
general timeline consists of three to six months from the filing of the arbitration to the final
payment date. American Arbitration Association (AAA) rules state that any claim under the
amount of $75,000 can be fast-tracked to be completed even faster. Under a fast-track
arbitration, the arbitrator sets a hearing date within 30 days of the legal claim.
Disadvantages of Arbitration
There are also some disadvantages of arbitration to consider:
Disadvantages of Mediation:
Everything You Need to Know
One of the main disadvantages of mediation is a lack of formal rules, which can make it
difficult for two disagreeing parties to reach a compromise.3 min read
One of the main disadvantages of mediation is a lack of formal rules, which can make it
difficult for two disagreeing parties to reach a compromise.
What is Mediation?
If you're involved in a legal issue that you would prefer to resolve outside of a courtroom,
you could use mediation. During mediation, two people who are involved in a legal dispute
will meet and attempt to settle a disagreement with the help of a mediator, which is a neutral
third party.
With mediation, only the parties involved will be responsible for resolving the issue. No
outside party will make any decisions. Mediators are not responsible for making a final
decision. Instead, mediators help to outline the issue and facilitate communication so that
the parties hopefully can agree to a mutually beneficial settlement.
Mediation is an alternative solution for resolving legal disputes and allows people to avoid
going to court. This process is particularly beneficial in emotional cases, such as divorces. If
you're interested in resolving a legal issue through mediation, you should be aware that
there are both disadvantages and advantages to this process. You should be sure that the
advantages outweigh the disadvantages before engaging in mediation.
Mediation, while not a formal, will usually follow a few basic steps:
Contract disputes.
Contesting a will.
Disagreements between partners in a business.
Divorces and child custody arrangements.
Disadvantages of Mediation
Mediation has several disadvantages of which you should be aware. First and foremost, it is
very rare that the complete truth of an issue is revealed during mediation. On the other
hand, in a court case, attorneys will have the ability to procure evidence and call witnesses,
which is not available in mediation. In addition, courts are set up so that both parties in a
case will be treated fairly. While this is also a goal in mediation, equitable treatment can be
hard to achieve in certain circumstances.
Another disadvantage of mediation is that there are no formal rules for the process. If you
don't employ a skilled mediator, this lack of formal rules can often result in an impasse.
Mediation also relies on the cooperation of both parties. If the parties involved in mediation
aren't able to compromise, the process can end in failure.
One of the biggest disadvantages of mediation is that it can be very difficult to make sure
that the settlement is fair to both parties. If one party has access to more resources or is
savvier about the mediation process, they may be able to get the other party to agree to a
settlement that isn't in their best interests.
It's very common for mediation to end without the parties successfully reaching a settlement
agreement. For instance, the parties might spend a tremendous amount of money, effort,
and time only to find that resolving a dispute through mediation is impossible and that they
will need to go to court after all.
When mediation is unsuccessful, it can make a court case more difficult, as one of the
parties may have already used their best evidence, meaning the other party will know what
to expect during the trial. In order to protect their privacy, the parties may decide to keep
their sessions private so that the information discussed does not become public knowledge.
Mediators, while they have some ability to bring balance to these sessions, are limited in
how much they can actually do. Unlike state and federal courts, there are no constitutional
protections available in mediation. Setting legal precedent in mediation isn't possible.
In mediation, there is no discovery process like there would be in a normal court case. If a
party relies on information from the other party to help prove their claim, there is no formal
method to acquire this information during mediation.
Even if the parties reach a settlement agreement, the dispute may not be over. One party
may decide at a later date that they aren't actually satisfied with the agreement and may file
a lawsuit.
If you need help understanding the disadvantages of mediation, you can post your legal
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companies like Google, Menlo Ventures, and Airbnb.
Advantages to Arbitration:
1. More flexibility. In the case of arbitration, the parties have far more flexibility to select what procedural and
discovery rules will apply to their dispute (they can choose to apply relevant industry standards, domestic law,
2. Select your own Arbitrator or Mediator. The parties can often select the arbitrator or mediator that will hear
their case, typically selecting someone with expertise in the substantive field involved in the dispute. The
arbitrator (or panel members) need not even be an attorney. In this way the focus can be on the substantive
issues involved rather than on technical procedural rules. In normal litigation, the parties cannot select the
judge, and the judge and/or jury may often need expert witnesses to explain extremely complex issues. The
greater the expertise of the arbitrator, the less time that needs to be spent bringing him up to speed.
3. A jury is not involved. Juries are unpredictable and often damage awards are based solely on whether they
like the parties or are upset at one party because of some piece of evidence such as a photo that inflames the
passion of the jury. Juries have awarded claimants damages that are well above what they would have received
through alternative dispute resolution; and they have also done the opposite.
4. Expenses are reduced. Attorneys and expert witnesses are very expensive. Litigating a case can easily run
into the tens of thousands of dollars. Alternative dispute resolution offers the benefit of getting the issue
resolved quicker than would occur at trial – and that means less fees incurred by all parties.
5. ADR is speedy. Trials are lengthy, and in many states and counties it could take years to have a case heard
by a judge or jury. Appeals can then last months or years after that. In a matter of hours, an arbitrator often can
often hear a case that otherwise may take a week in court to try with live witnesses. With arbitration, the
evidence can be submitted by documents rather than by testimony presented through witnesses. ADR can be
scheduled by the parties and the panelist as soon as they are all able to meet together.
6. The results can be kept confidential. The parties can agree that information disclosed during negotiations or
arbitration hearings cannot be used later even if litigation ensues. The final outcome can also be made private
if the parties so stipulate and agree. On the other hand, most trials and related proceedings are open to the
7. Party participation. ADR permits more participation by the litigants. ADR allows the parties the
opportunity to tell their side of the story and have more control over the outcome than normal trials overseen
by a judge. Many parties desire the opportunity to speak their piece and tell their side of the story in their own
8. Fosters cooperation. ADR allows the parties to work together with the neutral arbitrator or mediator to
9. Less stress. ADR is often less stressful than expensive and lengthy litigation. Most people have reported a
10. Conclusion. Because of these advantages, many parties choose ADR (either mediation or arbitration) to
resolve disputes instead of filing or even proceeding with a lawsuit after it has been filed. It is not uncommon
after a lawsuit has been filed for the court to refer the dispute to a neutral before the lawsuit becomes too
costly. ADR has also been used to resolve disputes even after trial, while an appeal is pending.
11. Sample subject matters. Some examples of disputes that can be settled by ADR include but are not
limited to:
Disadvantages of ADR:
1. There is no guaranteed resolution. With the exception of arbitration, alternative dispute resolution processes
do not always lead to a resolution. That means it is possible that you could invest the time and money in trying
to resolve the dispute out-of-court and still end up having to proceed with litigation and trial before a judge or
jury. However, you will certainly better understand the other side’s position!
2. Arbitration decisions are final. With very few exceptions, the decision of a neutral arbitrator cannot be
appealed, with fraud being an obvious exception. Additionally, some states will not enforce decisions of
arbitrators that are patently unfair, a high standard to meet. Another ground for setting aside an award is if the
arbitrator’s decision exceeded the scope of the arbitration clause or agreement. Some arbitration clauses are
broad, others are narrowly limited to specific disputes. Decisions of a court, on the other hand, usually can be
appealed to an appellate court for a variety of legal grounds and for numerous alleged procedural errors.
3. Limits on Arbitration Awards. Arbitrators can only resolve disputes that involve money. They cannot issue
orders compelling one party to do something, or refrain from doing something (also known as injunctions). For
example, Arbitrators generally cannot change title to real property. Of course this is subject to the specific
present in ADR, such as the liberal discovery rules used in U.S. courts, which make it relatively easy to obtain
5. Fee for the Neutral. The neutral mediator or arbitrator charges a fee for his or her services. Depending on
the arbitrator or mediator selected, the fees can be substantial (of course the parties typically agree to divide the
fees between themselves). Depending on the contract language and state law, a prevailing party can be
awarded fees and costs. A judge on the other hand, charges no fees for his services.
6. May have no choice. Often the contract in dispute contains a broadly worded mandatory arbitration clause.
Many lease agreements and employment contracts, for example, contain mandatory arbitration provisions, as
do operating agreements and other types of business contracts. Unless both parties waive arbitration, most
7. Non-binding arbitration. Sometimes the court may order nonbinding or Judicial Arbitration. This means that
if a party is not satisfied with the decision of the arbitrator, they can file a request for trial with the court within
a specified time period after the arbitration award. Depending on the process ordered, if that party does not
receive a more favorable result at trial, they may have to pay a penalty or fees to the other side.
8. Warning. The parties pursing ADR must be careful not to let a Statute of Limitation run while a dispute is in
any ADR process. Once the statute expires, judicial remedies may no longer be available.
Mediation:
In mediation, the mediator (a neutral) assists the parties to come to a mutually acceptable resolution of their
dispute. The parties may meet altogether in the same room, or often stay in separate offices and the mediator
moves back and forth between the parties. Unlike a judge at a trial or an arbitrator at an arbitration hearing, the
mediator does not decide how to resolve the dispute. The parties themselves decide how best to resolve or
settle their own dispute. The parties work together to come to a mutually acceptable compromise that satisfies
everyone, instead of working against each other. Mediation often leads to better communication between the
parties and lasting resolutions. This can be particularly important when parties have a continuing relationship
with each other, such as neighbors or businesses. It can also be effective where personal feelings are getting in
the way of a resolution and a professional mediator can be brought in to act as a go-between. Mediation
normally gives the parties a chance to express their concerns in a voluntary, confidential process while
working towards a resolution and compromise. Mediation can provide the greatest level of flexibility for
parties. It’s a good sign when everyone leaves the mediation feeling like they gave up something. This type of
resolution is particularly helpful in high stakes litigation when a run away jury could break a business.
Conclusion:
There is no single answer as to whether to pursue litigation or ADR. Instead, the circumstances of each case
need to be weighed and carefully analyzed by all concerned parties. Knowing all the options is an important
first step. This can be done by considering the advantages and disadvantages of each proposed ADR method
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About the Authors: The law firm of Albright, Stoddard, Warnick & Albright is an A-V Rated
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attorney-client relationship. Please do not send any confidential information to us until such
Mr. M.J Fort of England defined administrative law for the first time in the year 1929 in his book on
administrative law stating that administrative law is that portion of law which is traced in rules,
regulations, notifications, order, bye-laws, schemes, circulars etc.
The most significant and outstanding development of the twentieth century is the rapid growth of
administrative law.
Though administrative law has been in existence, in one form or the other, before the 20th century, it is
in this century that the philosophy as to the role and function of the State has undergone a radical
change. The governmental functions have multiplied by leaps and bounds. Today, the State is not merely
a police State, exercising sovereign functions, but as a progressive democratic State, it seeks to ensure
social security and social welfare for the common man, regulates the industrial relations, exercises
control over the production, manufacture and distribution of essential commodities, starts many
enterprises, tries to achieve equality for all and ensures equal pay for equal work.
It improves slums, looks after the health and morals of the people, and provides education to children
and takes all the steps which social justice demands.
In short, the modern State takes care of its citizens from ‘cradle to grave’. All these developments have
widened the scope and ambit of administrative law.
Definitions:
It is indeed difficult to evolve a scientific, precise and satisfactory definition of Administrative Law. Many
jurists have made attempts to define it, but none of the definitions has completely demarcated the
nature, scope and content of administrative law.
“Administrative Law is the law relating to the administration. It determines the organization, powers and
duties of the administrative authorities”
2: It is a very wide definition, for the law which determines the powers and functions of administrative
authorities may also deal with the substantive aspects of such powers, for example, legislations relating
to public health services, houses, town and country planning, etc.
But these are not included within the scope and ambit of administrative law.
Again, it does not include the remedies available to an aggrieved person when his rights are adversely
affected by the administration.
“Administrative Law is the law concerning the powers and procedures of administrative agencies,
including especially the law governing judicial review of administrative action.”
In one respect, this definition is proper as it puts emphasis on procedure followed by administrative
agencies in exercising their powers.
Upendra Bakshi:
On an analysis of the above definitions, it may be submitted that there is no comprehensive definition
of administrative law till today. In can be concluded that administrative law is that portion of law which
determines the organization, powers and duties of administrative authorities, administrative agencies,
quasi administrative authorities, and the law that governs the judicial review of administrative activities.
The following factors are responsible for the rapid growth and development of administrative law:
There is a radical change in the philosophy as to the role played by the State. The negative policy of
maintaining 'law and order' and of 'laissez faire' is given up. The State has not confined its scope to the
traditional and minimum functions of defence and administration of justice, but has adopted the
positive policy and as a welfare State has undertaken to perform varied functions.
2) Urbanization:
Due to the Industrial Revolution in world and due to the emergence of the factory system in our
country, people migrated from the countryside to the urban areas in search of employment in factories
and large scale industries. As a result of which there arose a need for increase in providing housing,
roads, parks, effective drainage system etc. Legislations were enacted to provide all these basic facilities
and accordingly administrative authorities were required to make rules and regulations, frame schemes
for effective infrastructure and facilities which ultimately lead to the growth of administrative law.
Enacting legislations, getting assent from the President is all a lengthy process, whereas it is very easy
and quick to frame schemes and rules for meeting any emergency situations that arise in a locality. Due
to the flexibility of making the rules, obviously there is a constant growth of administrative law making
in the country.
As per the Principle of separation of powers these organs of Administration have been proposed and
created. The Executive, the Legislative and Judiciary are these three organs which are functioning
separately. But in order to coordinate both Administrative Law and for Administrative Organs
5) Inadequacy of Courts:
The judicial system proved inadequate to decide and settle all types of disputes. It was slow, costly,
inexpert, complex and formalistic. It was already overburdened, and it was not possible to expect
speedy disposal of even very important matters, e.g. disputes between employers and employees,
lockouts, strikes, etc. These burning problems could not be solved merely by literally interpreting the
provisions of any statute, but required consideration of various other factors and it could not be done by
the ordinary courts of law. Therefore, industrial tribunals and labour courts were established, which
possessed the techniques and expertise to handle these complex problems.
The legislative system was also inadequate. It had no time and technique to deal with all the details. It
was impossible for it to lay down detailed rules and procedures, and even when detailed provisions
were made by the legislature, they were found to be defective and inadequate, e.g., rate fixing. And,
therefore, it was felt necessary to delegate some powers to the administrative authorities.
At present all the technical experts are with the Administrative organs. In case it is attempted to shift
the legal job of Administration to the present judiciary and the present legislations, the same will be
handicapped due to lack of technical knowledge. Thus in order to utilise and use the talent of the
technical experts which are at present with the Administrative organs it is really wise creating new and
coordinating branch of law i.e. Administrative law.
There is scope for experiments in administrative process. Here, unlike legislation, it is not necessary to
continue a rule until commencement of the next session of the legislature. Here a rule can be made,
tried for some time and if it is found defective, it can be altered or modified within a short period. Thus,
legislation is rigid in character while the administrative process is flexible.
The administrative authorities can avoid technicalities. Administrative law represents functional rather
than a theoretical and legalistic approach. The traditional judiciary is conservative, rigid and technical. It
is not possible for the courts to decide the cases without formality and technicality. The administrative
tribunals are not bound by the rules of evidence and procedure and they can take a practical view of the
matter to decide complex problems.
Administrative authorities can take preventive measures, e.g. licensing, rate fixing, etc. Unlike regular
courts of law, they have not to wait for parties to come before them with disputes. In many cases, these
preventive actions may prove to be more effective and useful than punishing a person after he has
committed a breach of any provision or law. As Freeman says, "Inspection and grading of meat answers
the consumer's need more adequately than does a right to sue the seller after the consumer is injured."
11) Can take effective steps:
Administrative authorities can take effective steps for enforcement of the aforesaid preventive
measures; e.g. suspension, revocation and cancellation of licenses, destruction of contaminated articles,
etc. which are not generally available through regular courts of law.
It can be seen from the present set up of the Administration that relations of the public authorities with
the citizens have been deeply changed. Citizens were not directly involved in the administration in the
earlier days. They were somewhat isolated from the sphere of Administration. There was a wide gap
between the Administrative organs and the then citizens. This is not the case today. Today in most of
the states there is a democratic Administration of either type. It is therefore, the association of the
people is found to be integral. The citizens are closely assonated with the state Administration. In view
of these changing relations, the basic structure of the legal set up needs to be rearranged. The
Administrative law, has therefore, developed.
“Conclusion”
In simple words, the reason behind the growing importance of Administrative law is the assumption by
the Administrative authorities of very wide powers including legislative and judicial which was the result
of the social welfare state. Since Administrative law is primarily concerned with the control over the
exercise of their powers, i.e. to prevent Administrative authorities from abuse and misuse of powers, it
has become a subject of growing interest.
In recent times a new branch of Administrative Law is emerging, which is popularly called Global
Administrative Law. According to this the WTO is dictating guidelines on subsidiaries, facilities and
services to the people in different countries. The Banks have also not been spared from the interference
of the WTO guidelines. Thus, it may be submitted, that due to the emerging Global Administrative Law,
in the near future there is every possibility for the necessity to relook into the reasons for growth of
Administrative law.
3 comments:
1.
Administrative law (sometimes referred to as ‘public law’) is a body of law which has
developed principles which seek to ensure that public bodies act in a way which is legal,
reasonable and fair. It provides a way to challenge maladministration or the misuse or
abuse of power by a public body.
Administrative law forms part of the common law of England and Wales. It has been
developed over many years by the judiciary through case law. It provides the means by
which the judiciary controls and prevents the misuse of power by the executive. (More
information on how the UK constitution is based on separating the functions of
legislature, executive and judiciary, and the checks and balances inherent in that
system, can be found here.)
Apart from the UK Parliament (which is sovereign), all other public bodies are
subordinate to the law. In other words, UK Government Ministers, the Welsh Ministers,
local authorities and other public bodies must act within the law when performing their
functions. Similarly when legislating the National Assembly for Wales must not encroach
beyond the subject matter upon which it has competence to legislate, as set out in
the Government of Wales Act 2006. Even the Crown itself is required to observe most
laws. There are two aspects to checking whether a public body has acted within the law:
public bodies must not act outside their powers - this involves ensuring both that the
person or body performing a function is the person or body with the power to perform that
function, and that the person or body does not exceed the scope of the powers given to them;
public bodies must exercise their powers in a lawful way - different considerations arise
depending on the circumstances, but broadly this can involve ensuring that something done
by a public body is reasonable, done for a proper purpose, proportionate and procedurally fair,
and that the public body discharged its functions in a way that was impartial and took into
account all relevant considerations.
Administrative law is not concerned with the merits of a decision, for example whether a
decision was a good one, or whether it was based on a correct interpretation of the law.
Rather, administrative law looks at the process by which a decision was reached.
There is a specific court procedure for challenging the lawfulness of something done by
a public body. The procedure is known as judicial review and it enables a person to
bring a court case to claim a specific legal remedy. The remedies available in judicial
review include a quashing order (to nullify a decision taken by a public body), a
prohibiting order or injunction (to prevent a public body from doing something), a
mandatory order (requiring a public body to do something) and a declaration (to declare
what the legal position is).
The Government publication “The Judge Over Your Shoulder” (last updated in 2006)
provides an overview of the principles of administrative law and the judicial review
process. In addition, there is a Wales only document called “Making Good
Decisions” which provides a similar overview.