The Difference Between Arbitration & Litigation The U.S. legal system uses litigation as a means for parties to resolve disputes. In litigation, one party sues another by serving a summons and complaint and arguing the merits of a claim. The claim might be for monetary damages, personal injury, breach of contract, sexual harassment, wrongful termination, or any number of civil theories. Because litigation in court can be costly and time-consuming, parties sometimes turn to alternate dispute resolution. In alternate dispute resolution, the parties agree to have their legal dispute adjudicated by a judge, an arbitrator, or a panel of arbitrators. Arbitration is praised as a means of resolving disputes in a more streamlined and cost-effective manner. Arbitration generally does not involve the same protocol for discovery, which is the process by which parties exchange information and records in preparation for a bench trial. Arbitration can be more informal, where an arbitrator might try to resolve certain differences or demands of the parties, rather than having the parties engage in aggressive motion practice. It should be noted that arbitration is generally binding upon the parties. This means that the decision of the arbitrator would have the same weight and enforceability as the verdict of a jury or the written decision of a judge.