Views regarding the relative merits of litigation and arbitration for purposes of U.S.-based dispute resolution vary widely. On the one hand, according to Domke on Commercial Arbitration § 1:4 (2010), “It would seem that the many business problems facing clients can be resolved, to the advantage of everyone, quickly and in a less costly fashion, by resorting to arbitration rather than by using the traditional adversarial method of dispute resolution.” On the other hand, one can easily find articles suggesting that arbitration is losing favor; see, for example, this 2010 Legal Intelligencer article.
Furthermore, so many variables are involved that any broad generalization is bound to be of limited utility. So we recommend that when deciding between litigation and arbitration, you consult litigators with broad experience of both systems.
But when choosing between litigation and arbitration for purposes of confidentiality agreements, it’s important to bear in mind that for protecting confidential information, equitable remedies are generally more important than damages, and arbitration is less effective than litigation as a means of securing equitable remedies. So for purposes of confidentiality agreements, if you opt for arbitration, the arbitration language makes an exception for proceedings seeking equitable remedies, such as an injunction.