ARBITRATION MEDIATION vs

by Jack G. Marcil • Photography by Thuen Studios

The distinctions between mediation and arbitration in a public’s mind are often blurred. Both are forms of alternative dispute resolution (ADR) that are designed to keep parties out of court or to remove them from protracted legal fighting when already in court. The two concepts are different. This article will discuss in very general terms the difference between the two.

Mediation

Mediation involves using a neutral third person who helps the parties come to an agreement. Mediation is a flexible process that can be used to settle disputes. Mediation conferences can be scheduled very quickly and requires a small amount of preparation time. The role of the mediator is to help the parties reach a solution to their problem. The mediator remains neutral throughout the process. Mediation is voluntary. No one can force you to mediate. However, in some jurisdictions it is a requirement of the court to go through the mediation process before getting into a court hearing. Mediation is confidential. Each party will disclose facts to the mediator, who will maintain confidentiality. Typically the parties share the cost, which is normally an hourly charge by the mediator. Many cases are resolved within a few hours. Mediation does work. Statistics show that 85 percent of commercial matters and 90 percent of personal injury matters end in a written settlement agreement. If you are unable to reach an agreement you can still go to court. Mediation details will not be disclosed at the court hearing.

Arbitration

Arbitration is the referral of a dispute to one or more impartial persons for a final and binding determination. Private and confidential, it is designed for quick, practical, and a economic resolution. Arbitration is a form of binding dispute resolution equivalent to litigation in the court. Arbitration is most commonly used for the resolution of commercial and construction disputes. In arbitration, a third party considers both sides in a dispute and makes a decision that resolves the dispute. An arbitrator may be an attorney, an engineer, an accountant, or other expert, depending on the nature and complexity of the claim. The arbitrator is impartial and neutral. In most cases, the arbitrator’s decision is legal binding on both sides. After considering the parties’ submissions, the arbitrator issues a final and binding award. The award includes reasons for the decision. The cost of arbitration varies. Arbitration tends to be less expensive, less formal, and more flexible than court. The rules of evidence are not as strict. Like mediation, arbitration is less time consuming and less expensive than litigation.

Mediation and arbitration are the most common forms of ADR. They are used in place of the litigation process (that is taking a dispute to court). In the United States, litigation is very costly. The parties to a dispute can agree on a different process. Typically any process that is outside the litigation process must be agreed to in writing. That document will outline the procedures for the mediation or arbitration.

This article was written and prepared by Jack Marcil, an attorney with the Serkland Law Firm in Fargo, North Dakota. For call 232.8957, email jmarcil@serklandlaw.com or visit www.serklandlaw.com.