Effective Methods of Alternative Dispute Resolution . . .Mediation and Arbitration

In everyday life, we experience situations involving different types of people. It is not unusual that we get into conflicts in some of those encounters.

In attempting to resolve a dispute, we oftentimes try to avoid confrontation. In some cases, however, confrontation is inevitable. A more subtle approach involves informal negotiations in trying to resolve a dispute in an amicable, civilized manner.  Another approach involves alternative dispute resolution (“ADR”) methods: either mediation or arbitration. Finally, there is traditional court litigation.

What Is Mediation?

Mediation is an alternative dispute resolution approach that involves a mediator – a neutral third party who facilitates negotiations between the disputing parties. The role of the mediator (usually a retired judge or experienced attorney) is to create a non-adversarial atmosphere conducive to negotiations. The mediation approach is flexible, consisting of a joint session and a series of private sessions (caucuses). Initially, the parties and their attorneys gather with the mediator in a joint session to discuss the disputed issues openly.  In the private sessions, the mediator identifies each party’s position, estimating the strength and credibility of their positions. Oftentimes, a successful mediation ends in a settlement agreement, whereby the disputing parties draft and sign an agreement resolving their disputes. Such an agreement is an enforceable, binding contract.

What is Arbitration?

Arbitration is an alternative resolution approach that is oftentimes now being ordered by courts and/or agreed to by disputing parties.  Arbitration is more similar to traditional court litigation, then is mediation.  Arbitration does not involve a mediator.  Instead, in arbitration, the disputing parties usually agree to a single “neutral” arbitrator or a panel of (generally) three (3) arbitrators … one (1) arbitrator selected by the plaintiff (the party/parties who filed the Complaint which initiated the lawsuit), one (1) arbitrator selected by the defendant(s) (the party/parties being sued and named in plaintiff(s)’ Complaint), and one (1) neutral arbitrator (agreed to by the plaintiff(s)’ arbitrator and the defendant(s)’ arbitrator) who will be the chief arbitrator and usually make decisions prior to and at the arbitration hearing (based on applicable rules of arbitration procedures and rules of evidence) on how the arbitration will be conducted.  The “single” arbitrator [or, in the case where there is a panel of arbitrators,] the majority of the arbitrators (on the panel of arbitrators) decide(s) who prevails or “wins” in the arbitration … after hearing the evidence and argument of the parties (usually presented by the attorneys for the disputing parties). 

Prior to the arbitration hearing (the date of which will be agreed to by the parties and/or the parties’ attorneys and the mediator(s)), it will be determined whether the arbitration will result in a non-binding or binding arbitration decision/award.  If the arbitration will result in a non-binding arbitration decision/award, any party can reject the arbitrator(s) decision/award by filing a motion for trial (sometimes known as a motion for trial de novo) which will usually result in a jury trial (unless the disputing parties resolve their dispute(s) by entering into a settlement agreement before trial or even prior to the completion of any trial and/or the judge or jury returning their verdict).  If, on the other hand, the arbitration will result in a binding arbitration decision/award, the decision/award of the arbitrator(s) will be enforced by the court in which the lawsuit was initially filed (unless the award/decision can be proven to be the result of or involving fraud … or some other improper, prejudicial matter).  [NOTE:  An arbitration will usually only result in a binding arbitration award/decision if the parties agree to binding arbitration before the arbitration hearing or the parties were ordered to binding arbitration by the Court (usually because of an agreement entered into between the disputing parties before the dispute occurred (such as in a nursing home or commercial contract).] 

The arbitration hearing will generally be held in an informal manner with the parties’ attorneys introducing evidence and witness testimony by summarizing the evidence and testimony (including expert testimony) and the basis/bases for and relevance of the evidence and the testimony to the arbitrator(s).  The parties, however, are usually not prohibited from presenting/admitting depositions or portions of deposition testimony … or even calling witnesses and presenting live testimony at the arbitration hearing, however, parties are encouraged not to do so unnecessarily.  The parties are oftentimes required or at least encouraged, to submit a written case summary and evidence binder(s) prior to the scheduled date for the arbitration hearing … in order to assist the arbitrator(s) in understanding the parties’ dispute(s) and the evidence, when the evidence is later presented at the arbitration hearing. [NOTE:  The party/parties must meet the burden(s) of proof with respect to proving all liability and damage issues at the arbitration hearing … just as they would be required to do at a formal trial before a judge and/or jury.]  Within a reasonable time (usually 10 calendar days), following the completion of the arbitration hearing, the arbitrator(s) are generally required to issue and send their written arbitration decision/award to the parties.  The arbitrator(s) will also generally file their arbitration decision/award with the Court at that same time (under seal, if the decision/award is the result of a non-binding arbitration).  If the arbitration results in a non-binding arbitration decision/award, the parties generally have a limited period of time during which to notify the Court and the other disputing parties that they reject the arbitrator(s)’ decision/award, by filing a motion for trial. If a motion for trial is filed, the Court will then generally set the case/dispute(s) for trial.  If no motion for trial is filed regarding the non-binding arbitration decision/award (within the applicable time period) or if the arbitrator(s)’ decision/award is the result of binding arbitration, the arbitrator(s)’ decision/award will, generally, upon motion from a party or parties, be entered by the Court and enforced by the Court as a final judgment … to perhaps include awarding attorney’s fees and recoverable costs when the prevailing party has received a judgment in an amount which (if obtained through trial) would have resulted in an award of attorney’s fees and recoverable costs, under applicable fee and cost-shifting court/procedural rules. 

How Is Arbitration Different Than Mediation?

Despite both being out-of-court, alternative dispute resolution approaches, there are significant differences between mediation and arbitration:

1. In arbitration, the arbitrator (or panel of arbitrators) issues a non-binding or binding decision possibly “resolving” the dispute. In mediation, the mediator never imposes a settlement or renders a non-binding or binding decision. Instead, the mediator works with the parties to the disputes and their attorneys – evaluating their positions and attempting to facilitate a resolution/settlement of the disputes.  Mediation is always voluntary, meaning that the parties can change the mediator or end the mediation without reaching any agreement or settlement.  On the other hand, in arbitration (and traditional court litigation), the arbitrator or panel of arbitrators renders a decision as to the dispute(s) after hearing the evidence and argument of the parties or the parties’ attorneys.   

2. The arbitration process more closely resembles traditional court litigation, although the rules of evidence are generally applied in a more lenient manner at an arbitration hearing. However, at an arbitration hearing, the parties (usually through their attorneys) generally present evidence, including expert witness testimonies and documents by summarizing the evidence and/or introducing copies of depositions. Finally, there are no rules of evidence applied at mediation – the mediation process is generally loosely “structured” and highly informal.

3. A party’s “goal” in arbitration (as in traditional court litigation) is “winning” the case. The arbitration procedure is somewhat informal but adversarial and is basically a legal battle between the disputing parties. Mediation is different. It is a non-adversarial process of amicable negotiations. The mediator facilitates the discussions/negotiating between the parties with the ultimate goal of resolving and settling the dispute(s).

The Types of Disputes Suitable for Mediation and/or Arbitration

Mediation and/or arbitration can help to resolve almost any dispute or claim. The common types of disputes and/or claims which disputing parties oftentimes resolve using mediation and/or arbitration include:

• Personal injury disputes
• Contract disputes
• Construction disputes
• Business disputes
• Worker’s compensation claims
• Family law disputes
• Insurance claims
• Real estate and/or HOA disputes

How to Prepare for Mediation and/or Arbitration

To get the best result in mediation and/or arbitration, you should take various steps to prepare for a mediation conference or an arbitration hearing:

1. Invest time and effort in selecting the right attorney, mediator and/or arbitrator/panel of arbitrators. That includes hiring an attorney to represent you who is a skilled, experienced litigator, going through the list of mediators and/or arbitrators in your area, and evaluating their legal experience before hiring your mediator and/or arbitrator(s).
2. Understand the mediation or arbitration process.
3. Analyze your case. Learn all the facts and carefully define and thoroughly address the disputed issues. Prepare necessary documentation and other materials supporting your claims or defenses. In short, gather and present to the mediator and/or arbitrator(s), all necessary documents and other testimony/materials supporting your claim(s) or defense(s), to include all liability and damage issues.
4. Determine the lowest offer or price you are willing to accept or the highest amount/price you are willing to pay before mediation negotiations and/or an arbitration hearing.
5. Keep the negotiating door open in any mediation. If mediation efforts reach an obstacle or standoff, do not leave the negotiation table. Always stay and remain open to new proposals and refrain from making emotional decisions.
6. In an arbitration hearing, before an arbitrator or panel of arbitrators, present the most convincing evidence you and your attorneys can gather on all liability and damage claims or defenses.