DISPUTE RESOLUTION METHODS

Mediation? Arbitration? Litigation?

by Joelle Steele

Most people are familiar with litigation as a means of resolving a dispute. You go to Small Claims Court or you hire a lawyer and file a lawsuit in Superior Court. But as court dockets fill to the brim, often delaying trials for years at a time, other alternatives have come to the forefront of conflict resolution, the most common ones being mediation and arbitration. Both of these options rely on the intervention of a neutral third party and can be binding or non-binding. The following is some background on arbitration, mediation, and litigation to help you decide which option is best for your needs.

MEDIATION

Mediation has proven itself to be an effective means of resolving the majority of potential lawsuits and other non-criminal legal disputes. It is private, confidential, and usually non-binding. It is more casual in nature than is arbitration, and much faster and far less expensive than litigation. A neutral third party, the mediator, works with the two conflicting individuals to negotiate and facilitate a compromise and settlement, possibly even a reconciliation. Most mediators are attorneys, accountants, or marriage and family counselors. They do not provide legal advice during the mediation, do not draw legal conclusions about the case, and do not render decisions or make awards. They listen to both sides, retain objectivity, and encourage the parties to ultimately reach their own solutions and make decisions leading to a mutually beneficial settlement agreement.

During a mediation, the mediator helps the parties work through any interpersonal issues that may be contributing to the dispute and halting its resolution. If the parties are at an impasse and cannot reach a settlement, the case may necessarily proceed to arbitration or litigation. If they arrive at a settlement, an agreement is written, sometimes with the mediator's assistance, and is signed by the parties. The settlement can then be filed with the Court to enforce it should one of the parties ever breach the agreement. None of the confidential information or documentation disclosed during a mediation is filed with the Court or made public in any way.

ARBITRATION

Arbitration is also an effective way to resolve a dispute without trial. Sometimes, when mediation has failed, the next step is arbitration. But normally, arbitration is reserved for more complex cases such as labor disputes, product liability cases, and any complicated issue that must be negotiated and resolved. The complexity of the cases brought before an arbitrator make it take longer than mediation since so much information, evidence, and testimony must be processed and evaluated. It is therefore more costly, and the arbitrator's decision or ruling is usually, but not always, binding. There is little likelihood that the parties will reconcile to any degree at all once arbitration is complete.

An arbitrator is often an experienced attorney or judge who is familiar with the kind of dispute in question and is likewise familiar with the branch of law necessary to arbitrate that dispute. An arbitrator is a little like a "private judge" in that they have the same powers as a judge, although those powers are limited to the particular case at hand. In some instances, there may be three arbitrators for a case. If three arbitrators are to be utilized, each party selects one and then those two arbitrators select the third.

An arbitrator listens to testimony and questions the conflicted individuals and any witnesses or experts appearing on their behalves. There is no chance of an out-of-court settlement being reached because that is not the purpose of arbitration. Instead, the arbitrator(s) must be neutral while they carefully evaluate the dispute inside and out and come to a final written decision or ruling that is fair, just, and legally binding. Both parties must honor the arbitrator's ruling, usually referred to as an "award." If the arbitration is agreed in advance to be non-binding, then either party may reject the ruling entirely and proceed instead with litigation. Like mediation, arbitration is private and any documents used in the process are not made public.

LITIGATION

Litigation is the process of discovery, pre-trial actions, motions, settlement attempts, and the trial itself. In general, litigation should be used only as a last resort when it comes to conflict resolution. It is very expensive, time-consuming, emotionally and psychologically debilitating, and, worst of all, it is really just one giant crap shoot. You have no idea what to expect in the way of an outcome because you are at the mercy of lawyers, a judge, and a panel of jurors who may not necessarily be your peers. Everything that is revealed during litigation is a matter of public record. That means anyone, anywhere, including the press, can access it. Once a trial has ended and a verdict or judgment has been rendered, it is binding on both parties. But, if the losing party wants to pursue it further, they can always appeal to a higher court. Litigation can, in this way, drag on for years.

SUMMARY

If all individual efforts to settle a dispute have been exhausted by the parties, then it's time to try mediation. Failing that, arbitration is the next step. After that, you're left with litigation. The bottom line to all of this is: always have a solid, written contract for anything that could potentially go sour somewhere down the line. If you don't have a written agreement or the one you had was breached, try to act like adults and negotiate a compromise. You will both have to give and take to do this, and neither of you will be entirely happy with the results, but that's what happens in mediation, arbitration, and litigation. Save yourself time and money by putting aside your anger long enough to sort out the problem and reach your own settlement.