Explanation:

Disadvantages of Arbitration-

1.If arbitration is binding, both sides give up their right to an appeal. That means there is no real opportunity to correct what one party may feel is an erroneous arbitration decision.
2.If the matter is complicated but the amount of money involved is modest, then the arbitrator’s fee may make arbitration uneconomical. It may be cheaper to try the case before a judge in General District Court, where medical evidence can be presented by affidavits instead of paying the doctor to testify. However, the amount that can be awarded in that court is currently limited to $15,000.00.
3.Rules of evidence may prevent some evidence from being considered by a judge or a jury, but an arbitrator may consider that evidence. Thus, an arbitrator’s decision may be based on information that a judge or jury would not consider at trial.
4.If certain information from a witness is presented by documents, then there is no opportunity to cross-examine the testimony of that witness.
5.Discovery may be more limited with arbitration. In litigation, Discovery is the process of requiring the opposing party — or even a person or business entity who is not a party to the case – to provide certain information or documents. As a result, many times arbitration is not agreed to until after the parties are already in litigation and discovery is completed. By that time, the opportunity to avoid costs by using arbitration may be diminished.
6.If arbitration is mandatory or required by a contract, then the parties do not have the flexibility to choose arbitration only when both parties agree. Mandatory arbitration allows one party to force the other party to use arbitration. In situations where the arbitrator is reliant on one party for repeat business , then the potential for abuse is present and the advantage of impartiality is lost.
7.The standards used by an arbitrator are not clear, although generally the arbitrator is required to follow the law. However, sometimes arbitrators may consider the “apparent fairness” of the respective parties’ positions instead of strictly following the law, which would result in a less favorable outcome for the party who is favored by a strict reading of the law. Although this issue has been present since antiquity (Aristotle said ” an arbitrator goes by the equity of a case, a judge by the law, and arbitration was invented with the express purpose of securing full power for equity,” this consideration is often overlooked in evaluating the applicability of arbitration.