The Scope of Arbitration in the Legal Field: Exploring its Merits and Demerits
By- Anirudh Singh Malik
In recent years, arbitration, often known as an
alternative dispute resolution (ADR) process, has become extremely admired in
the legal community. It is a procedure where parties to a disagreement agree to
settle it outside of a courtroom setting and choose to have a neutral third
party, known as an arbitrator, provide a binding judgment.Arbitration now plays
a crucial role in modern legal practice due to the enormous expansion of its
legal sphere.
The scope of arbitration in legal field is determined
by several ways which are-
Commercial conflicts: Commercial conflicts, especially those involving
contracts, intellectual property, real estate, and international trade, are
frequently resolved by arbitration. Confidentiality, procedural flexibility and
the choice of arbitrators with relevant industrial knowledge all contribute to
its popularity in these sectors.
Employment problems: Arbitration can be used to settle employment
problems such as wrongful termination, discrimination, and salary conflicts.
Arbitration clauses are frequently seen in employment contracts, highlighting
how common arbitration is in this industry. Compared to litigation, arbitration
offers a quicker and more private resolution process.
Family Law: Arbitration is increasingly gaining popularity in cases involving
divorce, child custody and spousal support disagreements. To retain their
privacy and stay away from the combative aspect of court procedures, the
parties can opt for arbitration.
Construction and real estate: To resolve disputes resulting from contracts, flaws,
delays and payment concerns, the construction and real estate industries
frequently use arbitration. Due to its expediency and the arbitrators'
competence in particular industries, arbitration is chosen.
These are several situations through which the scope
of arbitration can be determined.
Further, the benefits of using arbitration instead of
conventional court proceedings include efficiency, cost-effectiveness, privacy,
flexibility and access to specialized knowledge. It also has drawbacks, such as
limited legal safeguards, potential biasand a lack of prior legal precedents,
constrained discovery and difficulties with enforcement. When thinking about
arbitration as a technique for resolving disputes, it is essential to
comprehend these factors.
Arbitration is a process depending on the parties
agreement and it's important to analyse whether the dispute's subject matter is
arbitrable or not. the contract and party autonomy are the characteristics of
the arbitration agreement.
Some Merits and Demerits are-
Merits-
One of arbitration's biggest benefits is its speed.
Arbitration is also quite efficient. Arbitration processes frequently result in
faster dispute resolution than judicial action. A simplified process is
achieved by allowing parties to select their arbitrators and set their own
schedules.
Arbitration may be less expensive than protracted
court proceedings. It lowers attorney fees, discovery costs, and other
court-related costs. Disputes are frequently settled between the parties
without the need for substantial legal counsel.
Privacy and Confidentiality as in arbitration hearings
are often discreet and private. This is appealing to companies and people that
want to keep private information private. Contrarily, court sessions are
frequently open to the public.
Demerits-
Limited Legal Protections in process of arbitration
contracts may bar parties from using certain in court available legal remedies,
like class actions and appeals. When battling against larger organizations,
this restriction may work against individuals and small businesses.
Potential for Bias nature because arbitrators are
frequently selected by the parties to a dispute, there is a risk that they
could be biased in Favor of the party that selected them. This impression may
make people less confident in the process's impartiality.
Absence of precedent in awards as unlike court
rulings, arbitration awards do not create new rules of law. This may result in
conflicting decisions in situations with comparable facts and a murky legal
system.
Conclusion
Arbitration has become a crucial tool in the legal
profession, providing a quick and private way to settle disputes in a variety
of fields. Its range has grown to encompass international, family, business and
employment issues. When selecting arbitration as a dispute resolution option,
it is crucial to consider both the benefits and drawbacks of the process. Even
though arbitration has numerous benefits, like speed, economy and privacy, it
also has drawbacks, including limited precedents, potential bias and legal
protection issues. In the end, the decision between litigation and arbitration
should be carefully considered, taking each case's distinctive circumstances
into account.
