Not every legal dispute is resolved in a courtroom. In certain areas, including labor disputes and contract matters, it is common for the matter to be submitted for mediation or arbitration. The procedures involved in these hearings may be less formal than those employed in the courtroom. However, the outcomes are just as important, and it is just as critical that you are well prepared.
It could be a serious mistake to believe that because these proceedings are less formal, your management staff or in-house team are well-equipped to handle them. An experienced mediation and arbitration attorney can walk you through exactly what to expect in the mediation session or arbitration hearing and can assemble and properly present the evidence and arguments that support your position.
What is Mediation?
Mediation differs from both trials and arbitration in one important respect: while a court proceeding is decided by a judge or magistrate and an arbitration hearing results in a ruling from the arbitrator, a mediator seeks to facilitate a settlement between the parties.
The mediator will listen to the key goals of each party, consider the evidence and the likelihood that one party or other will prevail at trial, and then attempt to guide the parties toward a settlement agreement that is acceptable to both. The mediator’s role is to apply some pressure to each party to guide them toward middle ground without making any independent judgment. If mediation fails–that is, if the mediator is unable to facilitate a settlement–then the case will proceed as it would have without the attempted mediation.
What is Arbitration?
Unlike a mediator, an arbitrator considers testimony and other evidence and then makes a ruling not unlike a court order. Depending on the circumstances, that ruling may or may not be binding. A decision entered in a binding arbitration proceeding may carry more weight than a trial court order in that the binding arbitration decision may not be subject to appeal.
Non-Binding Arbitration
Non-binding arbitration generally represents an effort to resolve a case without the expense and time commitment associated with a full trial. Non-binding arbitration differs from mediation in that rather than attempting to help the parties reach a settlement, the arbitrator enters an opinion much like the judge in a trial. The key difference is that the opinion issued is not binding on the parties, so either party who is unsatisfied with the ruling may opt to proceed with the case rather than accepting the arbitrator’s decision.
In addition to offering an opportunity for more efficient resolution of a case, a non-binding arbitration proceeding may offer the parties a clearer view of what they could expect if they were to proceed to trial, so that they may make more cost-effective decisions about whether to proceed to the next step, to accept the arbitrator’s recommendation, or to re-open settlement negotiations.
Binding Arbitration
Binding arbitration may arise in one of two ways. The parties may agree to binding arbitration in lieu of trial for any of a variety of reasons, including cost savings and the ability to resolve the case more quickly. More commonly, however, binding arbitration arises as a matter of contract. When a contract contains a binding arbitration provision, the contract also typically sets forth terms, including how the arbitrator will be selected and which party shall bear the expenses of arbitration.
As the designation suggests, a decision rendered in binding arbitration binding upon the parties. In fact, the grounds upon which a decision entered in binding arbitration may be appealed are more restrictive than the grounds on which a court order may be appealed. Some courts have held that the agreement represents an absolute commitment to accept the arbitrator’s decision, even if it is clearly legally erroneous. This is an issue that deserves serious consideration before a party agrees to binding arbitration, since submitting cuts off appellate rights the party would otherwise enjoy.
Get Guidance From an Experienced Mediation and Arbitration Attorney
Whether you are negotiating a contract and determining whether to include an arbitration clause or are involved in a lawsuit and considering trying mediation or agreeing to arbitration to expedite the process and cut back on costs, an experienced arbitration and mediation lawyer may be your best resource.
The attorneys at KPPB can help you make the best decisions for your company, from formulating relevant contract language or negotiating the terms of a mediation or arbitration proceeding to preparing you for and representing you at the mediation or arbitration. Contact KPPB LAW for more information.
