Arbitration is similar to a court process, except that it is private. An arbitration trial is usually held in an office (rather than a courtroom) where the parties and their lawyers present evidence to an arbitrator. The arbitrator functions like a private judge. (S)he receives the evidence and makes a decision.
There are a couple of advantages to using arbitration over a courtroom trial. First, since arbitration is private: only the parties, their lawyers, witnesses, and people invited by the parties may attend. A trial in court is completely open to the public, so anyone can attend.
Arbitration also allows for more flexible rules of evidence and procedure than those required by the court. At the beginning of the arbitration process the arbitrator, both parties and their lawyers agree upon the rules that will apply to their proceeding. For example, they could agree that some documentary evidence could be accepted without having to pay a witness to come testify as to the authenticity and accuracy of the documents. They could also agree to have witnesses submit sworn statements rather than having to testify in person.
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