Arbitration

Definition:

Arbitration is a procedure in which a neutral person, typically one person or a panel of three persons, hears both sides and decides the matter. The arbitrator's decision is binding.  Arbitration is “adjudicatory,” as opposed to “advisory,” because of the fact that the arbitrator renders a decision at the end of an arbitration hearing, and that decision is final and binding, subject only to a very limited court review. Arbitration is sometimes referred to as “non-binding” if the parties agree to make it so, but that is really a misnomer. Think of arbitration as a binding, adjudicatory process. Arbitration is typically less formal than a court trial, is usually shorter, and may be conducted in a private setting at a time mutually agreeable to the parties. The parties, by agreement, select the arbitrator(s) and determine the rules under which the arbitration will be conducted.