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Understanding The Difference Between Mediation, Arbitration and Trial

October 27, 2008

Many who confront the legal system for the first time, voluntarily or involuntarily, are faced with having to decide the forum in which their dispute will be resolved. In some instances, the forum in which a dispute will be resolved has been pre-selected by the parties however, more often than not, litigants will make their forum selection only after a dispute has actually arisen. It is therefore important to have an understanding of the difference between mediation, arbitration, and trial and the benefits and drawbacks of each. Often times, the forum selected will dictate how quickly and effectively the dispute is resolved.

Mediation is a voluntary process wherein two or more parties to a dispute try to resolve their differences with the assistance of a neutral, disinterested third party such as an attorney or retired judge. In most instances, the cost of the mediator is shared equally however, this is not always the case, especially where one party has an interest in seeing the matter resolve and offers to pay for the mediation in order to entice the other party to attend and partake.

The cost of retaining a mediator to assist in resolving your dispute will vary depending on such factors as the experience level of the mediator, how busy he or she may be, the nature of your dispute, the complexity of the issues presented, and the number of involved parties. Most private mediation centers bill for their mediator's time on an hourly basis however, others bill a flat fee for a half or full day.

Mediation is not, like arbitration or trial, adversarial in nature. As such, parties to a dispute can mediate their differences without counsel. Anything said during mediation is inadmissible in court. Thus, it is not uncommon to see parties who partake in a mediation sitting together in a conference room and, with the assistance of the mediator, working toward identifying the contested issues and then brain storming to resolve them. Mediation is a give and take process where there is no declared winner and no declared loser. For mediation to be successful, each side must give up something. Mediation is non-binding unless the parties agree to be bound by whatever result is achieved.

Mediation is favored and recommended in cases involving neighborly disputes, family disputes, or where parties to a lawsuit involving a claim for monetary damages believe that with the intervention of a neutral third party, a settlement can be achieved. Mediation is often the easiest and most cost effective way to resolve disputes. The major drawback to mediation is that if no resolution is achieved, the other side will, by virtue of your disclosures in mediation, have a better feel for what theories or claims (and strengths and weaknesses thereof) you might proffer in litigation.

Arbitration differs little from a bench trial (a trial in which the judge serves as trier of fact as opposed to a jury fulfilling that role). Arbitration may be binding or non-binding. Binding arbitration is usually by agreement of the parties with each expressing, in a writing, a willingness and commitment to be bound by whatever decision the arbitrator may reach. Non-binding arbitration affords the losing party the opportunity to seek a trial de novo (a trial on the merits without regard to the arbitrator's findings) however, there are often penalties imposed on the party requesting the trial de novo if he or she does not achieve a better result in trial than achieved in arbitration. The cost is similarly based on an hourly rate or half or full-day basis. 

In advance of arbitration, with all sides usually represented by counsel because arbitration is an adversarial proceeding, the arbitrator will be provided briefs detailing the positions, arguments and demands of each side. The rules of evidence in arbitration proceedings are quite liberal. As such, documents and other writings that might be excluded from evidence in a trial will be received and considered in arbitration. Arbitration will proceed in whatever fashion the parties desire. This may mean evidence is introduced through the admission of exhibits and by way of live or recorded testimony or simply by way of offer of proof (usually an attorney explaining what the evidence is). The proceeding is much more formal that a mediation and, as above, is adversarial in nature. Once all the evidence is received, the arbitrator will usually take the matter under submission and render an opinion and/or issue an award shortly thereafter. This opinion or award is final and may only, under very limited circumstances, be challenged or appealed.

Trial is what we most frequently see on TV. It is the subject of virtually every hit crime drama of our time from "LA Law" to "Boston Legal" to "Law and Order". In the absence of a plea agreement, trial is where virtually all criminal cases are adjudicated. In the civil arena, trials are less frequent. In fact, most, upward of 90%-95% of all litigated civil disputes settle in advance of trial. Trial is risky as there is no way to tell what a jury (should you chose to proceed by way of jury trial) will do with a case. Simple things such as demeanor, appearance, accent, etc. can have a dramatic effect on how a jury views a case. If there is anything certain about a jury trial, it is the uncertainty of the outcome.

Trials however, are expensive and carry with them not only the uncertainly referenced, but the risk of appeal which, at present, can tie a matter up for 2 ½ years. In addition, trials can be long and drawn out. Many judges only hold trial 3-days a week which means a 5-day trial with jury selection and deliberation can last 2-weeks or more.

2 Comments leave one →
  1. March 5, 2009 7:49 am

    Seems like a total waste of time to agree to arbitration or mediation. Just fight it out.

  2. July 18, 2013 5:28 am

    Powerful. I agree.

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