What is Arbitration?

Arbitration is a form of alternative dispute resolution that allows parties to resolve legal disputes without litigation. The process is overseen by a neutral arbitrator who renders a decision that is nearly always binding. The process can be voluntary or required by the court. It might be pre-arranged by way of a contractual agreement. Many proponents of arbitration consider the process more efficient than litigation. Arbitrators, as opposed to judges, are typically experts in the subject matter of the dispute and they are given more freedom and do not need to give reasons for their decision.

How is Arbitration Different from Mediation?

Arbitration and mediation are similar in that they are both forms of alternative dispute resolution, but there are some major differences. The primary difference is the control the third-party neutral (the arbitrator) in arbitration has over the outcome. In mediation, parties involved determine the outcome and whether or not they will abide by any suggested outcome. In arbitration, the arbitrator makes the final decision which is nearly always binding and parties must abide by that decision. It should be noted, even binding arbitration results can be challenged in court but the challenges rarely succeed. Arbitration also tends to be a more formal process and many consider it the middle ground between mediation and litigation.

Who Pays the Arbitrator?

Most of the time, the cost of arbitration is split between the parties involved. This is almost always the case when parties use an arbitrator assigned by an arbitration institution with fixed fees. In private arbitration, parties are free to determine how the costs will be handled, and while some choose a “loser pays” structure, most agree to split the cost in some manner. Parties involved in arbitration pay for their own counsel. Arbitration tends to be less expensive than litigation, but the cost of arbitration has been on the rise, especially when working with an experienced arbitrator.

Can mediation occur while a case is pending?

Yes, mediation often occurs in pending cases. It is one of the most powerful tools available to help parties involved in a legal dispute resolve their differences without entering a courtroom. The desire to negotiate can be expressed at any point once a dispute arises and judges often order disputing parties to attempt litigation before the case moves forward to a trial. Pending cases can be resolved through mediation which can save those involved time, money, and frustration. It can also help to preserve existing relationships and make it easier to work together regarding issues that arise in the future.

What does the mediator do?

Mediators help to facilitate conversations about a dispute and assist parties in coming to a mutually beneficial resolution. In most cases, the mediator will meet with each party involved in the dispute individually and then together to discuss their concerns and potential outcomes. They will help parties explore the pros and cons of each potential resolution and will explain to them what might be a likely outcome if mediation is unsuccessful and the matter is resolved in court. Mediators keep disputing parties focused on the issues at hand and assist them in moving forward toward a resolution that satisfies everyone.

Does the dispute have to be an existing court case?

No. Mediation is used in a variety of different places and some of these places are not a part of the legal system. For instance, mediation is used in many public school systems to resolve disputes between peers between students and teachers and between teachers and administration. Often, during contract negotiations between teachers and school districts, mediators assist the two sides in negotiating a contract. Mediation is also used in families when there are legal issues involved. Divorcing couples, families with concerns about loved ones’ estates, and parents who are trying to create a co-parenting arrangement for their children turn to mediation.

What type of dispute does mediation apply to?

Mediation can be used in just about any type of dispute, but there are some that tend to have a higher rate of success. In general, when there is a dispute between two or more parties that would benefit from a continued relationship after the dispute is resolved, mediation is the best option. This is because it enables the parties to play a role in the outcome of the dispute and gives everyone an opportunity to speak openly and honestly about their concerns. Because the mediator keeps the negotiations respectful and on-track, it can be easier to protect relationships long-term.

How long does mediation take?

It varies, but most mediation cases are resolved in as little as a few hours or a day. This is one of the most beneficial aspects of mediation. It can take a dispute that would take months or more to resolve if it were settled in a courtroom and bring it to a close in a single afternoon. Mediation creates a less formal environment and the mediator is allowed to keep parties focused on the ultimate outcome. Additionally, saving time also means the process of resolving the dispute will cost less than if it were settled in court.