Incentive Arbitration Law and Legal Definition
Incentive arbitration is a form of non-binding arbitration in which the parties agree to incur a penalty if they reject the arbitrator's decision and resort to litigation. The parties also undertake to incur a penalty if they fail to improve his/her position by some specified percentage or formula as given in the award. Penalties that the parties are liable to pay include payment of attorneys' fees incurred in the litigation.
