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What are the costs of arbitration?

Arbitration is an out of court alternative to litigation. It can be a more convenient way for legal battles to be settled out of court, and is often considered to be a cheaper route to settling a dispute. As is the case with many legal matters, though, this is debateable and depends on the individual circumstances.


Financially, the costs of arbitration do vary, since the cases can vary in complexity. If there is a long time spent on arbitration, as well as having to travel to multiple locations, the costs can be driven up further than a more straightforward litigation case. On occasion, an arbitration settlement can be non-binding, which means even after reaching a conclusion, the case can return to court, incurring the usual legal fees.

The costs awarded by the arbitrator are not always legal ones, but can be ‘other’ costs too, such as loss of earnings etc. As such, arbitration can end costly for some.


Since the arbitrators are less likely to have the same time constraints as a lawyer, arbitration is considered a quicker process than litigation. Rather as is the case with the finances, though, this will vary dependent on the case, and can end up taking much longer, since there are not such fastidious procedures in place. Time can also be affected by location and arbitration can take more time than regular court cases.


Ideally, an arbitrator will be chosen and agreed on by both parties. Many legal advisors offer arbitration services, such as Withers LLP. With expertise in this area, this can be a safe option to reaching a mutually beneficial conclusion. To ensure that a fair ruling is achieved, getting an independent arbitrator is essential.

Room for manoeuvre

Generally speaking, it can be difficult to appeal arbitration rulings, since they are not protected in the same way as a litigation case within a court room. This finality can be helpful in drawing a line under the dispute, but it is vital to choose an arbitrator who will award fairly, or you may be more stuck with a worse decision than if it was legally binding.


One of the hidden costs to arbitration is that the hearing will not take place in an open court, which means that transcripts are not made accessible by the public. As such, the hearing is more confidential than a traditional litigation case, which can be very valuable to some parties.