Arbitration is a private form of dispute resolution where a person you hire—an arbitrator—makes a binding decision, instead of a judge or jury. Compared to litigation, it’s usually faster and confidential and can cost less over time, but the upfront fees are higher and you generally cannot appeal the outcome. Most people end up in arbitration because a contract they signed requires it.
Most people never think about arbitration until they’re already bound by it.
The clause is usually buried on page nine of a contract you signed months or years ago.
Then a dispute arises, you assume you’ll have your day in court, and you learn the decision may rest entirely with one person you didn’t choose.
At MGW Law Partners, our attorneys help clients across Fayetteville and Northwest Arkansas understand these clauses before they become a problem.
Here’s what you need to know.
Arbitration vs. Litigation: They Are Not the Same Thing
Litigation is what most people picture when they imagine a legal dispute.
You go in front of a judge or a jury, and that judge or jury decides the outcome.
Arbitration is a form of alternative dispute resolution, alongside mediation.
The difference between the two matters.
In mediation, you hire a neutral third party to help you and the other side reach an agreement on your own.
In arbitration, you hire someone to actually make the decision for you.
That single distinction changes how your entire case unfolds.
Arbitration vs. Litigation at a Glance
Arbitration vs. Litigation: The Downsides of Arbitration
Arbitration has real drawbacks, and you should understand them before agreeing to it.
It can cost more upfront. The filing fees for arbitration are generally higher than the cost of filing a lawsuit, and you also have to pay the arbitrator directly. Those expenses tend to stack up at the front end of the process.
You give up your right to a jury. Juries are built into our constitutional system for a reason—they let a group of your peers weigh in on your dispute. In arbitration, one person makes the call instead of a panel of your peers.
There is often no appeal. When a judge or jury gets something wrong, you can take the matter to the court of appeals and ask them to review it. With arbitration, a wrong decision is generally final. If the arbitrator gets it wrong, you typically have no path to reverse it.
That finality is the single most important thing many people overlook.
The Upsides of Arbitration
Arbitration also offers genuine advantages, which is why it appears in so many contracts.
It’s usually faster. Litigation can stretch on for a couple of years. Arbitration is often resolved in a matter of months.
It can be less expensive over the long run. While the upfront costs are higher, arbitration can save money overall—particularly if you’re paying an attorney by the hour, since a shorter process means fewer billable hours.
It’s private. When you file a lawsuit, the case becomes part of the public record for anyone to see. Arbitration proceedings are generally kept confidential.
For many people and businesses, speed, cost savings, and privacy are exactly why arbitration is appealing.
Why Most People End Up in Arbitration: The Contract
It’s uncommon for two parties in an active dispute to simply agree to arbitrate instead of litigate.
Far more often, they’re in arbitration because a contract they signed earlier already requires it.
Somewhere in that agreement, both parties agreed—in writing—to resolve disputes through arbitration rather than the courts.
This is why the fine print matters so much.
Contracts are worded the way they are because attorneys write them.
If you don’t have a law degree and aren’t accustomed to reading contracts, even locating the arbitration clause can be difficult, let alone understanding what it commits you to.
Our business law and contract attorneys review these agreements before you sign, so an arbitration clause never catches you off guard.
“Can I Just File a Lawsuit Instead?”
This is one of the most common questions we hear.
The short answer: sometimes.
Not every arbitration clause is automatically enforceable.
Even when a clause appears in your contract, there are situations where you may still be able to pursue a lawsuit.
But there’s a catch—if you file suit and a judge finds the arbitration clause enforceable, your case can be dismissed and pushed into arbitration anyway.
Whether that clause holds up is a determination best made before you file, not after.
That’s precisely why it’s worth talking to an attorney early—whether your matter involves a construction or contract dispute, a personal injury claim, or another civil matter.
Talk to a Fayetteville Attorney Before You’re Locked In
The best time to understand an arbitration clause is before you sign—and the second-best time is the moment a dispute starts, before you make a filing decision you can’t easily undo.
At MGW Law Partners, our attorneys review contracts, evaluate whether an arbitration clause is likely enforceable, and help you choose the path that protects your interests.
We serve clients throughout Fayetteville, Bentonville, Rogers, Springdale, and Fort Smith—across Washington, Benton, Madison, Crawford, and Sebastian counties—in a wide range of practice areas.
To speak with attorney Tim Watson Jr. or another member of our team, call us or schedule online.
3729 N. Crossover, Suite #111, Fayetteville, AR 72703