What is the last resort for dispute resolution, often known for its cost and unpredictability?

Litigation serves as the last resort for dispute resolution within the insurance industry due to its inherent characteristics of being potentially expensive and unpredictable. When parties are unable to resolve their disputes through negotiation or alternative methods like arbitration or mediation, they often resort to litigation, which involves formal court proceedings.

In litigation, the outcome can be unpredictable as it relies on the decisions of judges or juries, which can vary widely depending on the case's specifics, the arguments presented, and the legal representation involved. Furthermore, litigation can lead to significant costs, including attorney fees, court fees, and other related expenses, making it a less desirable first option for dispute resolution compared to other methods that typically promote settlement and collaboration.

Other options, such as arbitration and mediation, are generally more structured and aim for resolution with less expense and shorter time frames. Appraisal is another method but is typically used in property insurance disputes to determine the amount of loss rather than resolving broader disputes. Thus, the recognized nature of litigation as complex, costly, and uncertain solidifies its standing as the final avenue for dispute resolution.