Arbitration is a private dispute resolution process in which one or more neutral arbitrators hear evidence and arguments and then issue a decision. In Florida, arbitration is commonly used in business, employment, construction, consumer, and court-connected civil cases. Understanding the difference between binding and non-binding arbitration helps parties make good decisions about whether—and how—to use arbitration.
Arbitration is an alternative to court litigation. The parties present their case to a neutral decision-maker (the
arbitrator) instead of a judge or jury. Arbitration can be created by:
Arbitration is an alternative to court litigation. The parties present their case to a neutral decision-maker (the
arbitrator) instead of a judge or jury. Arbitration can be created by:
In binding arbitration, the arbitrator’s decision (often called an award) is final and enforceable, with very limited
grounds for court review. Once the award is issued, the parties usually cannot re-litigate the dispute in court.
The arbitrator’s award provides a final resolution to the dispute.
Awards may be changed only for limited reasons, such as fraud or serious unfairness.
A binding arbitration award can be confirmed by a court and enforced like a judgment.
Many Florida contracts require binding arbitration for future disputes.
Binding arbitration is often used in commercial and business disputes, construction disputes, employment and consumer agreements, and cases where the parties seek finality and predictability.
In non-binding arbitration, the arbitrator issues a decision that is advisory, not final.
The parties may accept the decision, negotiate further, or reject it and proceed to court.
The award does not automatically resolve the dispute.
Parties usually have a limited time to request a trial after the award.
Non-binding arbitration is often used in Florida’s court system for certain civil cases.
The arbitrator’s analysis can help parties evaluate their case.
Non-binding arbitration is often used in court-referred civil cases under Florida rules, in matters where the parties want a reality check before trial, and in disputes where settlement is still likely.
Choosing between binding and non-binding arbitration is an important decision. Parties should consider the desired level of finality, their willingness to give up a court trial, the cost, time, and complexity of the dispute, the importance of privacy and confidentiality, and their tolerance for risk and uncertainty about potential outcomes.
A helpful framework for thinking about these choices is LIRA. Litigation interest and risk assessment is a
process for helping people analyze expected court outcomes, expected tangible costs, and intangible interests of
continued litigation. These elements are combined to develop a “bottom line.” This helps people plan strategy and
decide whether to accept an offer, continue trying to reach agreement, or stop negotiating (presumably to focus on
litigation). The same thinking applies when comparing arbitration and court options.
Arbitration rules and consequences can vary depending on the type of case, the arbitration agreement, and
applicable Florida law. Parties should consider consulting a qualified attorney to understand how arbitration would
apply to their specific situation.
Please email kyle@penningtonmediations.com if you require a full day mediation, weekend dates, or other accomodations.
