Disadvantages of arbitration as a method of solving disputes

Answers

• Arbitration may become highly complex
• Arbitration may be subject to pressures from powerful law firms representing
the stronger and wealthier party
• Arbitration agreements are sometimes contained in ancillary agreements, or
in small print in other agreements, and consumers and employees often do
not know in advance that they have agreed to mandatory binding pre-dispute
arbitration by purchasing a product or taking a job
if the arbitration is mandatory and binding, the parties waive their rights to access
the courts and to have a judge or jury decide the case
• In some arbitration agreements, the parties are required to pay for the arbitrators, which adds an additional layer of legal cost that can be prohibitive,
especially in small consumer disputes
• In some arbitration agreements and systems, the recovery of attorneys’ fees
is unavailable, making it difficult or impossible for consumers or employees
to get legal representation however most arbitration codes and agreements
provide for the same relief that could be granted in court
• If the arbitrator or the arbitration forum depends on the corporation for repeat
business, there may be an inherent incentive to rule against the consumer or
employee
• There are very limited avenues for appeal, which means that an erroneous
decision cannot be easily overturned
• Although usually thought to be speedier, when there are multiple arbitrators
on the panel, juggling their schedules for hearing dates in long cases can lead
to delays
• In some legal systems, arbitrary awards have fewer enforcement options than
judgments; although in the United States arbitration awards are enforced in
the same manner as court judgments and have the same effect
• Arbitrators are generally unable to enforce interlocutory measures against a
party, making it easier for a party to take steps to avoid enforcement of member or a small group of members in arbitration due to increasing legal fees, without explaining to the members the adverse consequences of an unfavorable ruling
• Rule of applicable law is not necessarily binding on the arbitrators, although
they cannot disregard the law
• Discovery may be more limited in arbitration or entirely nonexistent
• The potential to generate billings by attorneys may be less than pursuing the
dispute through trial
• Unlike court judgments, arbitration awards themselves are not directly enforceable. A party seeking to enforce an arbitration award must resort to judicial remedies, called an action to "confirm" an award
• Although grounds for attacking an arbitration award in court are limited, efforts to confirm the award can be fiercely fought thus necessitating huge legal expenses that negate the perceived economic incentive to arbitrate the dispute in the first place.

Titany answered the question on December 3, 2021 at 08:20

Next: Measures For Improving Industrial Relations
Previous: List some of the aspects of mediators code of conduct

View More Employee Relations Questions and Answers | Return to Questions Index

Disadvantages of arbitration as a method of solving disputes

Answers

Exams With Marking Schemes

Related Questions