Arbitration vs Adjudication
Understanding the distinction between arbitration and adjudication may be challenging for those not well-versed in legal terminology. While both terms refer to a legal process of resolving disputes, there is a difference between the two. A simple way to differentiate them is to think of adjudication as occurring in a courtroom, whereas arbitration takes place outside of a courtroom in a less formal setting.
What is Adjudication?
Adjudication can be defined as the legal process of resolving a dispute or controversy. Informally, it refers to the process where a court hears and settles a case between two or more parties. Disputes that can be resolved through adjudication include those between private parties such as individuals or corporations, disputes between private parties and public officials, and disputes between public officials and public bodies. The adjudication process aims to ensure that parties reach a settlement that is agreeable, reasonable, and in accordance with the law. It is governed by procedural rules and rules of evidence.
What is Arbitration?
Arbitration, like adjudication, is a legal process of resolving disputes. However, it serves as an alternative to adjudication, representing one of the various methods of Alternative Dispute Resolution (ADR). Arbitration does not take place within a courtroom setting like adjudication. It is defined as the submission of a dispute to an informal, unbiased third party chosen by the disputing parties, who agree to comply with the decision or award made by the third party. Arbitration can occur either voluntarily or as required by law. Rules of procedure in arbitration are typically governed by a country’s arbitration laws or according to the requirements given in the contract between parties. Matters submitted for arbitration generally include labor-related disputes, business disputes, and commercial disputes.
Key Takeaways
- Adjudication takes place in a courtroom before a judge and/or jury, while arbitration is heard by an informal third party, such as an arbitrator or a panel of arbitrators.
- Adjudication is a process that unfolds in court and represents a court trial, whereas arbitration is mostly voluntary and does not take place within a courtroom setting.
- Arbitration is an alternative to litigation and is preferred as it saves time, avoids unnecessary delay, and expense.
