Both mediation and arbitration are private forms of Alternative Dispute Resolution (ADR) an increasing popular choice in solving conflicts, whether business or personal. Unlike a court case, ADR is not matter of public record – an important feature to one or both of the parties involved in a dispute. ADR allows all parties to establish their own rules for settling disputes, governing evidence presented, experts consulted and conditions for the final agreement or decision.
MEDIATION
What is Mediation? Of the two, mediation is a more informal process for resolving a dispute. In mediation, the parties are responsible for an agreement; the mediator does not make or impose any decisions on them. The mediator simply aids the parties in negotiating a resolution, offering suggestions and insights during the process. Settlements achieved through mediation grant more satisfaction and finality since both parties participate in resolving the dispute. Mediation also keeps the option of a lawsuit should the parties not come to an agreement.
Definition: Mediation is a voluntary process in which an impartial mediator helps disputing parties communicate their interests and reach a mutually acceptable agreement. Mediation is a form of Alternative Dispute Resolution and does not involve the court system.
Process: A mediator facilitates initial communication between the parties and conducts as many sessions as necessary to achieve resolution. If the parties settle, an agreement is then affirmed in a written and signed contract. If not, clients have neither dispensed of their rights nor their opportunities for either arbitration or court trial.
Benefits:
- Communication and cooperation
- Informality and flexibility
- Confidentiality
- Reduction in hostility
- Reduction in time spent, cost accrued and personal stress
- Mutually acceptable agreements
- Assurance that needs are met
- Finality
ARBITRATION
What is Arbitration? Arbitration is a more formal process of resolving disputes; it follows official rules of procedure. The arbitrator is a neutral decision maker who applies more legal procedure than a mediator and who often has expertise in the area of the dispute. The parties must agree on the arbitrator or on the method of selection. The arbitrator's job is to listen to both sides and then make a decision that is legally binding for both parties. Arbitration greatly minimizes the risk that the parties will end up in a court.
Both mediation and arbitration carry advantages that far outweigh any disadvantage. Both save cost and time, and offer greater degree of outcome predictability. However, since these alternative procedures are not required to follow legal precedent, parties may not rely on legal precedent to determine the result.
Definition: Arbitration is the turning over of a disputed matter to an impartial decision-maker for the purposes of reaching a binding agreement or settlement without involving a court of law.
Process: In a more formal atmosphere, a single arbitrator, or a panel of three arbitrators, will conduct a hearing during which all parties present evidence in the form of documents, testimony and physical exhibits.
If all parties agree to binding arbitration, then the decision of the arbitrator(s) is final and the right of appeal limited. If non-binding, a decision is final only if all parties agree to accept it. Arbitration can sometimes serve as an evaluation of a court-case or a pretext to settlement
Benefits:
- Voluntary decision
- Less Formality than a court of law
- Confidentiality
- Reduction in time spent, cost accrued and personal stress
- Equal opportunity to present evidence and arguments
- A resolved dispute that can hold up in a court of law
- If nonbinding, a court trial is optional
- Finality
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