Mediation Compared to Other Forms of Dispute Resolution



Mediation can be the least expensive of all forms of resolution and can be done informally by the parties to satisfy their business needs and eliminate arbitration or litigation. The parties can formally agree to mediation via contract, requiring each other to comply in writing that the mediation must take place. Or the parties can agree informally to mediation, once it is clear that they need the assistance of an objective third party in discussing their positions.


Arbitration


Arbitration is very different from mediation. Arbitration occurs only if the parties agree to arbitrate. Normally an agreement to arbitrate is in a contract between the parties. If there is no contract, there is no agreement. There will have to be a separate agreement to arbitrate if any arbitration is to take place.

With arbitration there are series of formalized procedures that take place to allow the arbitration to proceed. There must be an agreement on choice of arbitrator or arbitrators (up to three). As with choosing a mediator, parties choosing an arbitrator will have to consider potential arbitrators’ experience, culture, location, availability. But the characteristics of an arbitrator are very different. The arbitrator will adjucate or decide the matter. The arbitrator does not conduct informal discussions with the parties. All discussions are with both parties present at all times. There is no confidentially. The arbitrator will only know what is presented when both parties are present. There is no separate confidential relationship or commentary between an arbitrator and a party.

The parties must determine that the arbitrator has enough time to hear the evidence which will be formally presented as in a litigation. There will be discovery in an arbitration although probably more limited than what parties or their lawyers are used to in a litigation.

All discovery issues in an arbitration are decided promptly by the arbitrator. The arbitrator has the discretion to determine when and where production shall occur.

In an arbitration there can be written submissions as to whether certain discovery will be allowed or whether certain information will be provided, and whether the arbitration should be split into two or more arbitrations depending on issues.

The key to a successfully arbitration is having the arbitrator on top of all issues and making decisions promptly. This distinguishes it from litigation, which can become bogged down very quickly and linger for many years.

The arbitrator has the ability to set the complete proceeding in a certain time frame, for example 90 or 120 days. In the agreement between the parties to arbitrate, it is now usual to have a determination that the arbitration must be done in 90 days.

Typically, an arbitration will be a fast track proceeding. Once an arbitrator is chosen, that arbitrator will determine the speed with which the arbitration goes forward.

An arbitration decision can be in writing or it can be a very short decision without reasoning.

In the United States, the arbitrator’s decision is typically enforced in court. However, the arbitration decision is not appealable and only in the rarest of circumstances can an arbitration award be reversed. The parties know going into an arbitration that the arbitrator has the “final word” and the appellate process will be a very unusual (consider it nonexistent) one for changing that result.

An arbitration is different from a mediation in the above respects. In contrast, in a mediation the parties determine how efficient the procedure is going to be and can cut off the mediation at any time. An arbitration is by agreement that the parties can’t unilaterally elect to opt out of. That would be a breach of contract.

There are very few similarities between arbitration and a mediation because the factfinder in an arbitration is very different from the informal facilitator in a mediation.

One can see an immediate benefit to mediation over arbitration, in that the parties may not like what is going on in a proceeding and can terminate the proceeding without any adverse effect on their possible legal or equitable rights. In the arbitration, parties are bound to the arbitrator and must endure a full trial on the merits.

Perhaps the greatest benefit of a mediation is that parties can get a business-driven resolution, satisfactory to both sides, within a day or two.


Litigation


Litigation is more similar to an arbitration than a mediation, but litigation is even more formal than an arbitration. Litigation is the last resort of people who want a resolution. There can be and often is substantial money—up to millions of dollars—spent in motion practice and discovery.

In litigation, the parties are formally in a court before a judge, or in some cases a jury. (An associate judge or magistrate may hear interlocutory matters.) The judge may not have as much experience in the subject matter as a mediator or arbitrator.

The court sets the timetable. A judge may have hundreds of cases assigned to him or her, and it is unlikely that a final or binding decision will come quickly in a particular case. In fact, a final resolution to a particular litigation may take several years, especially since a lower court decision may be subject to appeal.

Many rules apply in litigation that are not found in arbitration. For example, court proceedings adhere to rules of evidence that an arbitrator does not have to follow.( Note that a mediator does not even have to follow the rules of an arbitrator, just simply avail him- or herself of the opportunity to discuss a possible resolution with the parties.)


Summary


It is very clear in all jurisdictions that mediation is typically the far better mechanism for resolving disputes. Much less money. Much less time. An proceeding conducted by a facilitator rather than a determinator. And an informal confidential mechanism to make sure the parties are comfortable in resolving their disputes.


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