In the minds of many experienced attorneys and judges, ADR may not be a panacea, but it is sometimes better than litigation for resolving a conflict. Businesses considering using an alternative dispute process have a range of options, and several factors should be considered. Typically arbitration is conducted by one or three arbitrators. Some attorneys believe that a single arbitrator is best, primarily because this format is cheaper and usually does not result in a decision different from one that would be reached by three arbitrators. The parties rarely select an even number of arbitrators to avoid a split decision.
Arbitration can be binding or nonbinding.
In fact, courts defer to arbitration so much that it is nearly impossible to overturn an arbitration award, Harbison says. Many observers feel that nonbinding arbitration has little value because the arbitrator's decision can't be enforced. The parties can, of course, agree to accept the arbitrators' decision after it has been issued, but typically the party who loses an arbitration refuses to make it binding. Binding arbitration can be useful to businesses seeking a decision on a single dispute without having that decision serve as a precedent for all future cases involving similar disputes. Conversely, a company that desires to establish a binding principle to govern all future disputes of a similar nature would be better served using the normal litigation process.