Mediations vs. Arbitrations
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How arbitration and mediation are used to solve legal disputes
Mediation and arbitration are both processes designed to resolve a dispute between two parties. They have both emerged as alternatives to the expensive, lengthy, and uncertain litigation process (a trial). In many cases, they are used to try and negotiate a settlement before moving to litigation or in the place of a trial. This reduces the time, effort, and expense for everyone involved.
“Both arbitration and mediation employ a neutral third party to oversee the process, and they both can be binding. However, it is common to employ mediation as a non-binding process and arbitration as a binding process. In simpler terms, binding arbitration replaces the trial process,” according to FindLaw.com.
Arbitration uses a disinterested third party to evaluate the merits of a dispute and achieve a resolution.
Arbitration can involve only one “arbitrator,” but often there is a panel of arbitrators who, in a sense, become the judge. This panel has the authority to make decisions about the evidence and prepare written opinions, which may or may not be binding. “The most common procedure is for each side to select an arbitrator. Then, those two arbitrators select a third arbitrator, at which point the dispute is presented to the three chosen arbitrators. Decisions are made by majority vote,” according to FindLaw.
Steps involved in arbitration:
- The case starts when one party submits a Demand for Arbitration. The respondent is notified and the deadline set to receive a response.
- A preliminary hearing is held by the arbitrator(s) to discuss the case and procedures that will be used for witnesses, depositions, and how information and evidence are shared between the parties.
- The hearing commences, with the parties giving testimony and presenting evidence to the arbitrator(s). After the hearing is over, the two sides might still present more documentation to prove their case.
- The arbitrator(s) then close the case and give a decision, which might include a reward, depending on the type of case involved.
Mediation is generally the less formal process of the two. There is usually one mediator, rather than a panel. It can be voluntary, but in some states (Florida for example), the parties must go through mediation before the case can be brought to trial.
According to The Balance, “During the mediation, each side presents its view of the issue, and the mediator will work with each side in a caucus to attempt to work out a settlement. At the end of the process, the mediator can present findings and present a potential solution to the issue.”
Steps involved in mediation:
- Mediation begins by having the mediator introduce both parties, explain his or her role, and the rules of the process.
- Next, the mediator gathers statements from the parties, often asking questions in order to come to a more complete understanding. The parties don’t usually direct questions at each other.
- After the statements have been made, the mediator might ask more questions.
- The parties might then go to caucus, a process where they get together to discuss the issues and try to come to a decision. During this time, the mediator tries to propose solutions and settle the matter between the parties.
“The mediator works to find points of agreement between the parties, in an effort to reach an agreement. At some point, the mediator may pose a final agreement for the parties and urge them to accept,” according to The Balance.
Both mediation and arbitration can resolve disputes, though mediation is non-binding, and either process is often preferable to the expense, time, and public exposure of a court case.
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