Arbitration is similar to the court system with a few critical differences. An arbitration is presided over by an arbitrator. The arbitrator is like a judge. He or she will make rulings about what kind of evidence can be presented and then will issue a final decision.
However, arbitration is much more efficient than the court system. Typically, an arbitrator is a subject-matter expert in the industry or type of dispute. There is no jury, and the process of filing briefs and making arguments is much shorter than in court.
Arbitrations often happen with parties in completely different parts of the country. Both sides may “appear” via a conference call.
There are two different types of arbitration, binding and nonbinding. Binding arbitration means that beforehand the parties agree to abide by whatever decision the arbitrator makes.
Nonbinding arbitration results in a recommendation that the parties can sign off on in the form of a contract or by making the decision binding after the fact.
When the parties agree to arbitration they also usually agree to a set of rules that the arbitrator will follow. These rules deal with what kind of evidence is allowed, timelines, and any rights to appeal.
Depending on the circumstances, the proceedings of the arbitration may be kept confidential and out of the public record.