Arbitrators get paid for their time, but judges do not. Why is arbitration less expensive?
Arbitration decreases the time needed to resolve a dispute. This can dramatically reduce legal fees that would have been incurred during a lengthy court case. In arbitration, discovery proceedings (e.g., depositions, document discovery, interrogatories, etc.) are frequently limited. Discovery in a court case, often the most expensive component of litigation, may be extensive. Furthermore, motion practice—a common strategy in a court case—is significantly limited. All of these elements substantially reduce costs of arbitration compared to a trial.
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