The difference between arbitration and a lawsuit is primarily one of formality. For example, in arbitration, the formal rules of evidence don't apply. Each side can go on and on with narrative discussions, drawings and charts, and the arbitrator will take in all of it and make a decision. There are no juries in arbitration. Instead, usually one to three people specially trained in the subject matter of the arbitration hear the case. Arbitrations are heard much sooner than lawsuits can be scheduled. This can be either good or bad, depending on which side you're on.
Unless specified as such in a contract's arbitration clause, arbitrations are not final and binding. Either party can decide that they don't like the outcome. Once an arbitration award is made and a binding clause is in the contract, a court will make the arbitration award an enforceable judgment.
Comments:
For the purposes of this article, we will be dealing only with Florida laws, rules and procedures. Florida defines arbitration as: "A process whereby a neutral third person or panel, called an arbitrator or arbitration panel, considers the facts and arguments presented by the parties and renders a decision which may be binding or non-binding..." F.S. 44.1011(1). The practice of arbitration has been around almost as long as mankind. Arbitration was traditionally used by asking a neutral neighbor or fellow merchant to hear a dispute and all parties agreeing to abide by the decision. Florida has three basic types of arbitration: