Arbitration and Mediation: The Alternatives To Litigation

While the majority cases are settled with arbitration and mediation before a lawsuit reaches trial, these cases are still very complicated. These alternatives to litigation, however, often save both parties time and money.

Depending on the particulars of a case, a final resolution may or may not result from arbitration and mediation.

Cases can be settled at any point during litigation. Arbitration and mediation are often used to settle employment disputes and securities matters.

Arbitration

Arbitration is a more faster and more affordable alternative to litigation. Parties with smaller disputes often seek arbitration as a less formal alternative to going to court, but more complicated disputes can also be settled before an arbitrator or panel of arbitrators. Both parties agree to select a neutral third party, called an arbitrator, to judge and resolve their dispute. Like a court of law, both parties present their arguments, evidence, and testimony. The arbitrator will render a decision that will be both final and binding. Parties usually cannot appeal an arbitrator’s decision.

Mediation

Another alternative to litigation is mediation. Like arbitration, mediation brings in a neutral third party person. Unlike an arbitrator, who listens to both party sides and renders a binding decision, this third party mediator, facilitates negotiations between both parties to find a mutually pleasing solution to the dispute. Mediation is a voluntary process and any party can stop at any time. The parties select a mediator, usually a person with expertise in their area of the dispute. Then each party meets privately with the mediator to discuss their cases. The mediator will then assess the situation and suggest a settlement. While a solution from an arbitrator is binding, a solution from a mediator is only a suggestion. In mediation, if both parties find the suggested mutual resolution acceptable, then they will sign a settlement agreement.