Arbitration vs. Litigation

If you are an investor, you probably signed a binding arbitration agreement when opening your investment account. That agreement forces you to arbitrate any disputes with the investment firm, and prevents you from suing the firm in court. If you work in the investment industry and hold a securities license, whether you realize it or not, you have an obligation to arbitrate any dispute that might develop with your employer, rather than go to court. Even if you don’t hold a securities license, you might still be obligated to arbitrate disputes with your employer if your employment agreement contains an arbitration provision – which is becoming more and more common.

What are the practical differences between arbitration and courtroom litigation? In this video blog, I discuss that topic on a very basic level. The most important take away is that if you have an obligation (or desire) to arbitrate a dispute, it is vitally important that you engage an attorney experienced in arbitration. Arbitration is not “litigation lite” – it a unique style of dispute resolution that requires specific knowledge and experience in that arena. Some very experienced litigators might have little experience with binding arbitration. When hiring an attorney to represent you on a dispute that must be arbitrated, make sure to ask specifically what experience that attorney has in taking disputes to binding arbitration.