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Arbitration vs. litigation

On Behalf of | Sep 13, 2018 | Uncategorized

Disputes in the insurance world are common and there are often different ways to go about solving them. Two of the most common ways are in front of a court or arbitration.

Arbitration requires both sides to turn to a third party who will aid in resolving the dispute. Litigation involves going to court and battling in front of a judge and jury. There are pros and cons to each.

  • Time: Obviously, completing discovery needed to effectively prepare your case is extremely important. All cases whether in full litigation or arbitration should have discovery completed before proceeding to trial or arbitration. Arbitration is sometimes a quicker course once discovery is complete and the parties are ready for a final resolution of the matter. The parties can often work with an Arbitrator to select when the arbitration will take place. Typically, the arbitration can be completed in one day.
  • With litigation in court, the parties will have to work with the court and attend conferences. Sometimes trial dates can far out in the future depending on the court’s calendar. Additionally, trial usually takes more than one day to complete. This is helpful because it ensures that a jury is fully aware of the important issues of a case and allows the parties to fully and effectively present all the issues without worrying about time constraints. This often brings the best results.
  • Privacy: Insurers and their defense attorneys may not want to duke out their issues in a public setting, such as court. Litigation sometimes offers little privacy, unlike arbitration. 

Another thing to consider is the thoroughness of the litigation process. With cases litigated in court, there is almost always the option of getting help from the court regarding any disputed materials or information. Arbitration, being an expedited proceeding, sometimes limits various aspects of a case like discovery. Also, with arbitration there sometimes are not remedies for tangential disputes that arise during the course of a case.

Both arbitration and litigation are common when disputing insurance issues. Each have their pros and cons, but it is beneficial to know the difference between the two.