Understanding the cost of arbitration helps you budget for dispute resolution and compare it against litigation costs. This calculator estimates total arbitration expenses based on the arbitrator's hourly rate and expected time commitment.
Formula
The total arbitration cost is calculated as:
[\text{Arbitration Cost} = (\text{Hourly Rate} \times \text{Total Hours}) + \text{Additional Fees}]
Where:
- Hourly Rate is the arbitrator's fee per hour
- Total Hours includes preparation, hearings, and decision writing
- Additional Fees covers filing, administrative, and other fixed costs
Calculation Example
For a commercial dispute with:
- Hourly Cost: $150/hr
- Total Time: 40 hours
- Additional Fees: $0
[\text{Cost} = 150 \times 40 = 6{,}000]
Typical Arbitration Costs
| Dispute Type | Typical Hourly Rate | Estimated Hours |
|---|---|---|
| Consumer disputes | $100-200/hr | 10-20 hours |
| Employment disputes | $150-300/hr | 20-40 hours |
| Commercial disputes | $200-500/hr | 40-100+ hours |
| Complex litigation | $400-800/hr | 100+ hours |
Cost Comparison with Litigation
Arbitration generally offers:
- Faster resolution - months vs years in court
- Lower total cost - despite higher hourly rates
- More predictable timeline - easier to budget
- Confidentiality - proceedings not public record
However, consider that arbitration decisions are typically final with very limited appeal rights.
Additional Costs to Consider
- Attorney fees for your legal representation
- Expert witness fees
- Document production and review costs
- Travel expenses for parties and witnesses
- Hearing room or facility rental
- Transcript and recording fees