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Arbitration vs. Litigation: Making the Right Choice

September 20, 2023 (7 min read)


Attorneys often face critical decisions that can significantly impact their clients' cases and their bottom line. One of these crucial decisions is choosing between arbitration and litigation as the method of dispute resolution. This choice is far from one-size-fits-all and requires a thorough understanding of the advantages and disadvantages of each approach.

In this article, we will delve into the nuances of arbitration versus litigation, highlighting key factors that attorneys should consider when navigating this complex terrain. We'll explore when arbitration might be the better option and when litigation should take precedence. Plus, we'll introduce you to Lexis+ and Lexis+ AI, powerful legal research platforms that can be invaluable resources in both arbitration and litigation contexts.

What is Arbitration?

Arbitration is a form of alternative dispute resolution (ADR) that offers parties involved in a legal dispute an alternative to traditional courtroom litigation. Unlike litigation, where disputes are resolved in court, arbitration takes place in a private setting, typically chosen by the parties involved. It is characterized by its voluntary nature, meaning that both parties must agree to submit their dispute to arbitration.

In an arbitration proceeding, the parties appoint one or more arbitrators to act as neutral decision-makers. These arbitrators have the authority to hear evidence, weigh arguments, and render a binding decision. Arbitration is often chosen for its efficiency, cost-effectiveness, and privacy. It can be particularly well-suited for certain types of cases, such as commercial disputes and employment matters.

Lexis+ or Lexis+ AI provides a comprehensive platform that includes a wealth of administrative decision materials, making it an essential tool for attorneys engaged in arbitration. These materials help attorneys stay updated on precedents, decisions, and regulations relevant to their cases, allowing for well-informed and persuasive advocacy.

Is Arbitration Better than Litigation?

One common question among attorneys is whether arbitration is a better choice than litigation. The answer, as often in law, is that it depends on the specifics of the case and the parties involved.

Arbitration offers several advantages that can make it a favorable option for certain disputes. One key benefit is cost-efficiency. Arbitration tends to be less expensive than litigation because it typically involves fewer procedural hurdles and streamlined processes. Additionally, arbitration can be faster, often resolving disputes more quickly than court cases, which can drag on for years.

Another advantage is confidentiality. Arbitration proceedings are typically private, whereas court cases are a matter of public record. This confidentiality can be essential for parties wishing to keep sensitive information out of the public eye.

Furthermore, arbitration can be a flexible process, allowing parties to tailor the procedure to their specific needs. Small law firms often find this flexibility advantageous when dealing with unique cases or situations.

Lexis+ plays a crucial role in supporting attorneys during arbitration. Its vast repository of administrative decision materials, including past arbitration outcomes and relevant regulations, provides attorneys with the resources needed to build strong cases and advocate effectively for their clients. Access to such valuable information can be a game-changer in arbitration proceedings.

Why Choose Litigation Over Arbitration?

While arbitration has its merits, there are instances where litigation may be the preferred choice for attorneys. Litigation offers certain advantages that arbitration cannot replicate.

 Setting Legal Precedents

One significant advantage of litigation is the opportunity to set legal precedents—more so than arbitration. Court decisions create binding legal precedents that can influence future cases and shape the development of the law. For attorneys looking to make a broader impact or address legal issues with far-reaching consequences, litigation may be the more appropriate avenue.

 Uncooperative Opposing Party 

Another reason to choose litigation is when the opposing party is uncooperative or unwilling to engage in arbitration. In such cases, the court system provides a means to compel the other party to participate and follow through with the legal process.

Lexis+ is a valuable litigation resource for attorneys. Its extensive collection of case law allows attorneys to conduct thorough research, analyze past court decisions, and build persuasive arguments in court. Having access to this wealth of legal knowledge can be a significant advantage in litigation.

Other Factors That Influence the Path to Arbitration vs. Litigation

Contract Requirements

Certain types of contracts may have a mandatory arbitration clause built in to it. While there are rules surrounding mandatory arbitration clauses, it may be advantageous to consider arbitration clauses to keep the peace with opposing parties.

Client Preferences

It’s important first and foremost to understand your client’s preferences and business objectives. Some clients may value the confidentiality and expediency of arbitration, while others may prioritize the opportunity to set legal precedents through litigation.

Industry-Specific Considerations

The nature of the legal dispute and the industry involved can influence the choice between arbitration and litigation. For example, certain industries may have established norms or industry-specific arbitration forums that make arbitration more advantageous.

International Cases

If your law firm handles international clients or disputes, arbitration becomes more important for resolving cross-border disputes due to its enforceability under international agreements like the New York Convention.

Hybrid Approaches

in some cases, hybrid approaches, such as "med-arb" (a combination of mediation and arbitration), can be beneficial. This approach allows parties to attempt mediation first and then proceed to arbitration if mediation fails.

Long-Term vs. Short-Term Goals

Consider whether their clients have long-term or short-term objectives. Arbitration may provide quicker resolutions, but litigation could have a broader impact on the development of legal principles over time (like setting legal precedents).

Risk Assessment

Like any case, it’s important to conduct a thorough risk assessment. Attorneys should evaluate the potential risks and rewards of both arbitration and litigation, including the likelihood of success and the potential costs involved.

Mediation as a Precursor

Mediation can sometimes serve as a precursor to arbitration or litigation. Parties may opt for mediation to explore settlement options before resorting to more formal dispute resolution methods.

Impact on Attorney-Client Relationships

The choice between arbitration and litigation can impact the attorney-client relationship. Clear communication with clients about the pros and cons of each method can help align expectations and keep you both in step with each other.

What is a Disadvantage of Arbitration?

While arbitration offers several benefits, it's not without its disadvantages.

Limited Ability to Appeal

One notable drawback is the limited ability to appeal arbitration decisions. Unlike court cases, where decisions can be appealed to higher courts, arbitration awards are typically final and binding. This means that if the arbitrator makes a legal error or misinterprets the evidence, it can be challenging to have the decision overturned.

Arbitrator Selection Disputes

Additionally, the choice of the arbitrator is crucial in arbitration proceedings. Parties involved in arbitration must agree on the arbitrator or arbitrators, and this selection can sometimes lead to disputes. If one party perceives bias or unfairness in the choice of arbitrator, it can undermine the legitimacy of the arbitration process.

To mitigate these disadvantages, attorneys should carefully consider the selection of arbitrators, engage in thorough preparation, and ensure they have access to comprehensive legal research tools like Lexis+ to build a strong case from the outset.

Differences Between Arbitration and Litigation

To help you make an informed decision when choosing between arbitration and litigation, let's explore the key differences between these two dispute resolution methods:


  • Arbitration is often less costly than litigation due to streamlined procedures and fewer formalities.
  • Litigation expenses can escalate quickly with court fees, attorney fees, and lengthy proceedings.


  • Arbitration typically resolves disputes more swiftly than litigation.
  • Court cases can endure for years, causing prolonged uncertainty for parties involved.


  • Arbitration is private, protecting sensitive information from public scrutiny.
  • Court cases are part of the public record, potentially exposing confidential data.

Decision Enforceability

  • Arbitration awards are generally easier to enforce across borders due to international agreements.
  • Enforcing court judgments in foreign jurisdictions can be more complex.

Public vs. Private Proceedings

  • Arbitration occurs in a private setting, providing parties more control over the process.
  • Litigation takes place in open courtrooms, subject to public scrutiny.

The choice between arbitration and litigation depends on your specific case and goals. Attorneys should consider these differences and consult with their clients to determine the most suitable approach.

Choosing the Right Path for Your Firm

The decision between arbitration and litigation is a critical one for attorneys. While arbitration offers advantages such as cost-efficiency, speed, and privacy, litigation provides opportunities to set legal precedents and compel uncooperative parties.

To make the right choice, consider the unique circumstances of each case and the preferences of your clients. Additionally, leverage powerful AI legal research tools like Lexis+ or Lexis+ AI to support your decision-making process. Whether you opt for arbitration or litigation, having access to a comprehensive database of administrative decision materials and case law can greatly enhance your ability to represent your clients effectively.

As attorneys, your role is to advocate zealously for your clients and make strategic decisions that best serve their interests. By weighing the pros and cons of arbitration and litigation and utilizing the resources at your disposal, you can navigate the complex legal landscape with confidence and competence.

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