Non-Binding Arbitration

Non-Binding Arbitration

Non-Binding Arbitration is a dispute resolution process in which an arbitrator makes a decision regarding a dispute, but the decision is not legally binding on the parties involved.

In this process, the parties agree to present their case to an arbitrator, who evaluates the evidence and arguments presented. After considering the information, the arbitrator provides an opinion or recommendation, often referred to as an "award," but the parties retain the right to reject the arbitrator’s decision and seek resolution through other means, such as litigation.

One significant advantage of non-binding arbitration is that it allows parties to receive an impartial evaluation of their case without relinquishing their legal rights. This can help facilitate negotiation and settlement, as the parties may find the arbitrator’s insights valuable in reaching a mutually agreeable resolution.

For example, if two businesses are in a contract dispute, they might choose non-binding arbitration to resolve their differences. After the arbitration session, the arbitrator might suggest a resolution that one party finds acceptable while the other does not. The party that disagrees with the arbitrator’s recommendation can decide to continue negotiating or proceed to court, rather than being compelled to accept the arbitrator’s decision.

Overall, non-binding arbitration serves as an alternative to traditional litigation, offering a quicker and often less expensive way to resolve disputes while still allowing parties the flexibility to pursue other legal avenues if desired.