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ACCA Applied Skills · Corporate and Business Law (Global) · Alternative dispute resolution mechanisms

Hanra Co wants to sue a former distributor and needs a public judgment setting a legal precedent that will discourage similar breaches by other distributors. Which feature of court litigation, compared with arbitration, best supports this aim?

The public nature of court proceedings and the ability of judgments to create precedent best supports Hanra's aim. Arbitration is typically confidential and the parties choose the arbitrator, so its awards do not publicly deter others or set binding precedent.

  1. AProceedings and judgments are generally public and can create precedentCorrect
  2. BThe parties choose the decision-maker
  3. CProceedings are normally confidential

Explanation

Court hearings and judgments are generally public, and in precedent systems higher court decisions bind later cases. Arbitration is normally private and awards do not set precedent. The other two options describe features of arbitration, not litigation.

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