Cost Considerations

Arbitration Costs

Direct arbitration costs:

• Arbitrator fees: Typically $200-$500+ per hour, shared by parties
• Administrative fees: Filing and case management fees charged by arbitration organizations
• Hearing facilities: Cost of hearing rooms if not provided by organization
• Court reporter: If transcript desired

Attorney fees:

• Legal representation costs similar to litigation
• May be lower if discovery limited
• Depends on case complexity and arbitration procedures

Other costs:

• Expert witness fees
• Document production and review
• Travel costs if arbitration location distant

Litigation Costs

Court filing costs:

• Filing fees (vary by court and case type)
• Service of process fees
• Jury fees if jury trial
• Generally lower than arbitration administrative fees

Attorney fees:

• Discovery costs (depositions, document production)
• Motion practice and hearings
• Trial preparation
• Trial time
• Appeals if pursued

Other litigation expenses:

• Expert witness fees
• Court reporters for depositions
• Document review and production
• Demonstrative exhibits and trial materials

Timeline Comparison

Arbitration Timeline

Typical arbitration timeline:

• Arbitrator selection: 1-3 months
• Discovery period: 3-9 months (if permitted)
• Hearing scheduling: Based on arbitrator and party availability
• Hearing: Days to weeks depending on complexity
• Award: 30-90 days after hearing typically
• Total: Often 6-18 months from filing to award

Factors affecting timeline:

• Arbitrator availability
• Complexity of case
• Amount of discovery permitted
• Scheduling conflicts
• Number of hearing days needed

Litigation Timeline

Typical litigation timeline in Texas:

• Pleadings and initial motions: 2-6 months
• Discovery: 6-18 months
• Motion practice: Ongoing throughout
• Trial setting: May wait months for available trial date
• Trial: Days to weeks
• Total to judgment: Often 18-36 months
• Appeals if pursued: Additional 12-24+ months

Factors affecting timeline:

• Court docket congestion
• Complexity and discovery needs
• Motion practice and delays
• Settlement discussions
• Appeals

Appeal Rights and Finality

Arbitration: Very Limited Appeal Rights

Narrow grounds for vacating awards:

• Corruption, fraud, or undue means
• Evident partiality or corruption by arbitrator
• Arbitrator misconduct
• Arbitrator exceeding powers

What courts will NOT review:

• Arbitrator's factual findings
• Arbitrator's legal conclusions
• Sufficiency of evidence
• Whether court would have decided differently
• Alleged errors of law or fact

Litigation: Full Appellate Review

Appellate rights:

• Can appeal to Court of Appeals
• Further appeal to Texas Supreme Court (discretionary)
• Review of legal errors
• Review of some factual determinations
• Opportunity to correct trial court errors

Appellate process:

• Notice of appeal filed after judgment
• Appellate briefs submitted
• Oral argument may occur
• Appellate court issues opinion
• Can affirm, reverse, or remand

Discovery Differences

Arbitration Discovery

Typical limitations:

• Limited number of depositions
• Restricted document requests
• Abbreviated discovery period
• Arbitrator discretion on scope

Implications:

• Lower discovery costs
• Faster to hearing
• May limit ability to develop case fully
• Less opportunity to discover adverse information

Litigation Discovery

Full discovery available:

• Depositions of parties and witnesses
• Interrogatories
• Requests for production
• Requests for admission
• Subpoenas to third parties

Implications:

• Thorough case development
• Opportunity to obtain all relevant evidence
• Higher costs and longer timeline
• More leverage in settlement negotiations

Privacy and Confidentiality

Arbitration

Privacy:

• Hearings not open to public
• Proceedings conducted privately
• No public attendance at hearing

Confidentiality:

• Not automatic - must be provided by agreement or rules
• Parties can agree to confidentiality provisions
• Some arbitration rules include confidentiality
• Court filings related to arbitration are public

Litigation

Public nature:

• Court proceedings open to public
• Court filings are public record
• Trial testimony and evidence public
• Judgments publicly available

Limited confidentiality options:

• Protective orders for sensitive documents
• Sealed proceedings (rare, requires showing)
• Settlement agreements can include confidentiality

Strategic Considerations

Factors Often Considered When Arbitration Is Chosen

• Confidentiality needs: Desire to keep dispute private
• Specialized expertise: Ability to select arbitrator with industry knowledge
• Finality preference: Desire to avoid appeals and achieve final resolution
• International disputes: Arbitration awards more easily enforced internationally
• Jury avoidance: Preference for professional decision-maker over jury
• Contractual requirement: Arbitration clause in contract

Factors Often Considered When Litigation Is Chosen

• Appeal rights valued: Desire for appellate review of legal errors
• Discovery needs: Extensive discovery necessary to prove case
• Jury trial desired: Preference for jury decision
• Public record: Want public accountability or precedent
• Injunctive relief needed: Immediate court orders required
• No arbitration agreement: No contract requiring arbitration
• Complex legal issues: Benefit from appellate review