Arbitration is a process where two parties to a civil lawsuit or pre-litigation dispute opt to have an arbiter resolve their conflict instead of going through the civil litigation process. There are two types of arbitration, binding and non-binding. Binding arbitration is when the arbiter's decision is legally binding and can be enforced by a court order.
This type of arbitration commonly occurs because an individual signed an "arbitration agreement" in a contract with a corporation, so they must arbitrate their contract dispute rather than sue in court. It less commonly occurs because corporations invoke the arbitration agreement on the customer or employee, often as a legal bullying tactic.
(see Trump v. Monin)
The main differences between arbitration and civil court are as follows:
In arbitration, there are no appeals.
In civil litigation, both parties have the right to appeal.
In arbitration, there is limited discovery (it is harder to get the other side to present evidence).
In civil litigation, the court can easily subpoena witnesses, objects, and documents and throw people in jail for contempt if they don't produce them.
In arbitration, it is exceedingly difficult, if not impossible, to get a verdict overturned if it was obtained by a witness lying.
In court, lying is punishable by perjury charges, and the witness who perjured can be held liable for altering the outcome of the case.
In arbitration, the arbiter's decision is final whether or not in has any legal basis.
In court, any legal discrepancy in the proceedings can be grounds for appeal.
In arbitration, there is no jury.
In court, a jury's finding of fact can have a substantial impact on the outcome of the case.
In arbitration, both sides pay the arbiter.
In court, this would be bribery!
The other type of arbitration is non-binding arbitration, which is essentially a form of mediation because the parties don't have to accept the outcome of the lawsuit, but the arbitration could help them come to a settlement. Non-binding arbitration is often found in religious contexts, where scripture is applied to the dispute by a religious elder.
Shockingly, religious arbitrations can also be be binding, and individuals can be forced into them by means arbitration agreements.
*Note: the American Arbitration Association does have a limited appeals process.
