Why is arbitration preferred over traditional litigation in agreements?

Arbitration is often preferred over traditional litigation because it typically reduces costs associated with judicial processes. This is due to several factors: arbitration proceedings are generally less formal than court trials, leading to decreased legal fees and reduced court costs. Additionally, arbitration can be more efficient, potentially shortening the timeline for resolution and allowing parties to avoid the extensive delays often present in litigation. This cost efficiency is a significant consideration for parties looking to resolve disputes effectively.

The other options highlight concepts that do not accurately represent the nature of arbitration. While arbitration can be faster and less structured compared to litigation, it is not always guaranteed to be so, as some cases may still take considerable time. The assertion about appeals is misleading; arbitration usually has limited grounds for appeal, contrasting with traditional litigation where appeals are more common and can be more extensive. Lastly, while parties may meet in person during arbitration, it is not a requirement, as arbitration can also take place through written submissions or virtual means.