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Understanding Arbitration and Mediation

Alternative dispute resolution is a trendy new phrase that is becoming more and more popular as companies start paying attention to the rising costs of litigation. The idea behind alternative dispute resolution is that parties can use methods besides litigation to settle their differences. Two of the most common methods of alternative dispute resolution are arbitration and mediation. Both of them pull the dispute out of court, and bring it in front of a neutral third party, an arbitrator or a mediator, respectively. However, there are key differences between these two methods of problem solving, and knowing which to use when is important.

Arbitration

Of the two methods, arbitration is the one that looks more like a standard lawsuit. The two parties bring their case before an arbitrator, who acts as the case’s judge. Just like an ordinary litigation, the arbitrator has the ultimate authority to decide the merits of the case. However, there are a variety of differences that can make it cheaper to move a case through arbitration. Much of the expense of litigation comes from the expansive discovery process and an abundance of pretrial motions. While full use of these tools is important when the other side also has access to them, arbitration often curtails their use by both sides. Arbitrators and the parties have much more control over the procedures used, which they can use to make the process faster and cheaper.

Arbitration has also come into vogue as far as settling disputes between companies and their customers. A recent set of Supreme Court decisions, such as AT&T Mobility v. Concepcion, have allowed companies to put arbitration clauses into contracts that they give to their customers. This allows corporations to avoid being held hostage by the threat of drawn out, frivolous litigation. However, companies writing these clauses should take care to not structure the arbitration in such a way that it is unfair to the customers.

Mediation

Mediation is the other major option for settling disputes without having to get into a courtroom. Although it still involves parties in opposition to each other, mediation is more collaborative than arbitration. The main difference is that mediators do not have the power to actually settle the dispute the way arbitrators do. Instead, they work with both sides to help them come to a mutually agreeable arrangement.

Although procedures differ, many mediations start off with a short opening statement by both sides explaining the dispute. The idea behind the statements is not so much to convince the mediator that their side is correct, as it is to provide insight into how both parties view the case. Once the statements end, mediators often move the parties and their lawyers into two separate rooms, one for each side in the case. Then, the mediator moves back and forth between them, trying to get both sides closer and closer to an agreement. The mediator keeps those conversations confidential, so the parties can speak candidly. If everything works out, the sides will reach an agreement, and they settle the case.

Participating in alternative dispute resolution is different than dealing with an ordinary case. If you believe you may become involved in such a process, contact an experienced West Palm Beach dispute resolution attorney at Pike & Lustig, LLP today to learn more about the process.

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