Non-Binding Arbitration: Tool or Trap?

You may have never heard of arbitration, let alone the difference between “binding” and “non-binding.”

Think of arbitration as a “diet trial.” It is held before a qualified arbitrator, usually a specialized attorney or retired judge, who reviews evidence and issues a written decision.

• Binding Arbitration: The decision is final. You are stuck with it.
• Non-Binding Arbitration: The decision is not final. Either party can reject the outcome and ask the Court for a real trial.

This raises a big question for anyone involved in a lawsuit: Is non-binding arbitration a smart way to resolve a dispute, or just an expensive hoop to jump through?

After a decade in the courtroom, I’ve learned one truth: most people don’t want a fight; they want a fair resolution. Yet, our court system often delivers years of delay and massive bills. I believe non-binding arbitration can be the pressure valve we need. It offers a “preview” of the case without forcing you to give up your right to a jury trial. Here’s why.

1. It Removes Uncertainty: Jurors are unpredictable. Judges are human. A neutral evaluation from a seasoned arbitrator gives both sides a reality check grounded in experience rather than emotion. That clarity alone often brings parties closer to a deal.
2. It Saves Time (Which Saves Money): Trials can consume years of a client’s life. Discovery disputes and motions drag on endlessly. Non-binding arbitration compresses that timeline, allowing a case to be evaluated in weeks rather than waiting for years to go to trial. Even if it doesn’t end the dispute immediately, it narrows the fight significantly.
3. It Changes the Tone: When parties negotiate directly, it’s often about posturing. When an independent evaluator weighs in, the tone changes. I have seen cases resolve days after an arbitration decision that would otherwise have dragged on for months.

From a trial lawyer’s perspective, this process doesn’t weaken our case, it sharpens it. It rewards preparation over theatrics. Efficient resolution is the goal, and non-binding arbitration is often the best shortcut to get there.

By Robson D.C. Powers, Esq.

In law school, I traveled as far as Hong Kong to compete in arbitration competitions. As a student, the experience was amazing. But as a practicing attorney, I often find that the real-world costs of non-binding arbitration outweigh the benefits. Here is why I’m skeptical:

1. It’s All the Work with None of the Finality: Preparing for arbitration is basically preparing for trial. We have to gather exhibits, organize evidence, and prep witnesses. By forcing a client to do this for a non-binding process, they pay nearly the same price as a trial, but without the guarantee of a final result.
2. It’s Only Useful in Limited Circumstances: The theory behind non-binding arbitration is that a bad ruling may scare a difficult party into settling. In reality, reasonable people usually settle during mediation. If a party is truly unreasonable, a non-binding decision rarely changes their mind; they simply reject the ruling and push for trial anyway.
3. Mediation is Usually Cheaper and More Effective: I prefer mediation. It is faster, less expensive, and allows for creativity. An arbitrator can only award what you are legally entitled to if you go to trial. A mediator, however, can help craft “outside the box” solutions that the law might not strictly provide for, but which make everyone happy.

Ultimately, unless specific circumstances call for it, I generally view non-binding arbitration as a costly detour to be avoided.

By Kara B. Rogers, Esq.

Disclaimer: Nothing contained herein should be construed as legal advice. You should always consult an attorney for any legal questions. This article was originally published in the August Edition of the Cape Coral Sun and can be read in its original form at here.