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What is arbitration and why is it important?

ar·bi·tra·tion /ˌärbəˈtrāSH(ə)n/ the use of an arbitrator to settle a dispute.

Medical Definition of Agreement, Arbitration


An arrangement in which the patient waives the right to sue the physician and, instead, agrees to submit any dispute to arbitration. Arbitration agreements are legal and binding. The arguments in their favor are that, for patients, the case can be settled faster, and more money can go to the patient (rather than to a lawyer). Physicians can often get a discount on their malpractice insurance if the majority of their patients sign such agreements.


Chances are you have already entered into many arbitration agreements unknowingly. When you download an app or subscribe to a service, you probably quickly scrolled through the “terms and conditions” and push “Agree”, without reading or even understanding what is on the page. Without realizing it, you just consented to arbitration. So, what is an arbitration? Arbitration is a type of alternative dispute resolution outside of the courts. Rather than filing a lawsuit and subsequently going to court, the dispute is resolved by a “arbitrator”. If a dispute does arise, an arbitration agreement limits the resolution to arbitration and decides on the parameters for how arbitration will be conducted.

The purpose of an arbitration agreement is to keep litigation costs down and to keep disputes confidential. Unlike a trial or other court proceeding, arbitration is often faster and is not a matter of public record. This keeps the legal fees down and the privacy factor up.

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