What is the function of arbitration in dispute resolution?

Arbitration serves as a formal mechanism in dispute resolution where a third-party arbitrator is tasked with making a binding decision on the matter at hand. This process allows the parties involved to present their cases and evidence to the arbitrator, who then delivers a decision that is typically enforceable in a court of law. This binding nature distinguishes arbitration from other methods of dispute resolution, such as mediation or negotiation, where the outcome may not be enforceable without further legal action.

In employing arbitration, parties benefit from the expertise of the arbitrator, who is often specialized in the relevant field, and they can avoid lengthy and costly court proceedings. The structured approach of arbitration contrasts with informal discussions or negotiations, which may lack the authority to compel compliance with outcomes. It also differs from situations where judges are involved, as arbitration does not operate within the conventional court system but rather as an alternative form of resolution.