What Are Mediation and Arbitration?

By James Merritt, Jr., Attorney at Law

If you have ever been involved in any legal action, or have looked closely at some of the contracts you have signed, you may have heard the terms “mediation” and “arbitration.” These two terms refer to two ways by which litigation may sometimes be resolved without actually going to trial or before the matter goes to trial. Therefore, mediation and arbitration are both ways that legal disputes can be settled without trial and are sometimes referred to as alternative dispute resolution options. They are very different concepts, however.

In mediation, sometime after a law suit is filed and begun, the court may order, or the parties voluntarily agree that they will engage in a process by which they see if their dispute can be settled prior to trial. This mediation process is an informal proceeding where the parties, represented by their attorneys, meet outside of court and allow a third person (who is usually a very experienced attorney) called a mediator (usually certified by the state court system) to see if he/she can help the parties reach a resolution of their dispute. The mediator does this by working with both parties separately to come to a mutually acceptable resolution of the legal issue. If the mediation is successful, the agreed upon terms are drawn up in a legal document and signed by both parties. The agreement is binding and is filed with the court and the case is considered resolved. Merely because the parties agree to mediate does not mean they must agree to what is proposed. Either or both sides can reject it. If the parties cannot agree to a settlement, however, the mediator is dismissed and the case then proceeds to trial. Mediations are now common in all forms of litigation. The benefit of mediation is that it typically shortens the overall time for resolution of the legal action and avoids a trial, thereby saving the parties both time and money.

Arbitration is a far different process than mediation. Unlike mediation, once the parties agree to binding arbitration they usually agree to forego their right to a trial in court before a jury or judge by opting to have the matter heard by an arbitrator or arbitration panel. An arbitrator or arbitration panel is appointed either by the parties, an organization that provides arbitration services (such as the American Arbitration Association) or by the court. Arbitration is considered to be a less costly way of determining disputes because the parties may not engage in as much pre-trial discovery such as depositions. Once the arbitration begins the arbitrator or arbitration panel will decide the case. The arbitration award then becomes an order of the court, thus effectively ending the litigation. Unlike trials before a jury, there are only very limited grounds for appeal or challenging an arbitration award. Thus arbitration usually ends the case quickly. Arbitration is less common than mediation as an alternative dispute resolution option.

Depending upon the type of legal dispute you have, your attorney may recommend mediation or arbitration as an option to resolve your case. If you have any questions about either mediation or arbitration, please speak with your attorney. At Merritt Webb we are very experienced in both mediation and arbitration.

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