Willcox, Buyck & Williams, PA Blog

Tuesday, April 17, 2018

Mediation or Arbitration - Choosing the Best ADR for Resolving Your Company’s Disputes

In some cases, it might be necessary to go to trial to resolve a legal dispute. However, taking a matter to trial can be expensive and time-consuming.  In addition, the results are uncertain, especially when you consider that a jury could be swayed by emotional testimony instead of facts and legal statutes.

Instead of going to trial, you may choose a form of alternative dispute resolution (ADR) to resolve your legal dispute. Two of the most common forms of ADR are mediation and arbitration.

What is Mediation?

Mediation is a voluntary process whereby parties use a designated person (the mediator) to facilitate settlement discussions between the parties. A mediator is a neutral party whose role is to enable the exchange of information between the parties and assist in the bargaining process. The goals of the mediator are to help the parties find common ground, deal with unrealistic expectations, and achieve a final resolution of all issues.

A mediator is a “go-between” for parties. He explains the parties’ views to each other so that the parties can begin to understand the issues from other perspectives to find a compromise that works for everyone. The mediator may offer creative solutions and alternative terms of the settlement to assist the parties in arriving at an agreement that both parties can accept.

While mediation can allow parties to deal with the underlying issues that caused the dispute, mediation is not about right or wrong nor is it about fault or truth. The mediation process is simply about seeking a resolution of the issues without court intervention.

If an agreement is reached, the mediator and the attorneys for both parties work together to formalize the agreement. Once all parties execute the written settlement agreement, the agreement is a legally binding contract that is enforceable by the courts.

What is Arbitration?

Arbitration is like mediation in that the parties work with a neutral third party (an arbitrator or a panel of arbitrators) to settle disputes without a trial. The arbitration process is a “win-lose” process much like a trial instead of a “win-win” result as is the case with mediation. Whereas mediation is concerned with finding common ground for a settlement by understanding the other party’s perspective, arbitration is concerned with fault and truth to resolve a dispute.

Arbitration is not as formal as a courtroom; however, there are rules that each side must follow. The rules vary greatly and are generally set out in the contract that is in dispute. If the dispute does not involve a contract, the parties work with the arbitrator to set the rules for the arbitration.

As with a trial, each party presents evidence, including witness testimony, to support the party’s claims. However, most arbitrations simplify and limit the process of presenting evidence so that the entire process is more efficient and quicker than a trial. The rules of evidence you find in court are relaxed or nonexistent.

After both sides present evidence, the arbitrator takes the matter under advisement and renders a decision. If the parties agreed to binding arbitration, the decision is binding and enforceable by a court. However, in the event of non-binding arbitration, either party may continue with a lawsuit and trial.

Many companies include arbitration clauses in their contracts to force disputes into binding arbitration proceedings. In some cases, the party signing the contract may not even be aware that they are consenting to arbitration to resolve any disputes.

Benefits of Mediation and Arbitration

There are reasons for and against using ADR as a means of resolving disputes. Benefits of ADR include:

  • Typically, less time-consuming than a trial, so that you settle the matter quickly.

  • ADR is generally less costly than going to court.

  • Mediation and arbitration are private and confidential. Most court proceedings are public record so that anyone can view the transcript of the case and the outcome.

  • The ADR process usually allows the parties to “tell their story” more than a trial allows.

  • The parties are in control of the ADR process instead of the courts being in control.

  • Mediation and arbitration are more flexible and allow for creative solutions to disputes.

  • ADR focuses more on the issues involved than court rules and procedures.

The choice between mediation and arbitration can be difficult. Working with an experienced South Carolina ADR attorney is highly recommended. A South Carolina ADR lawyer can analyze the situation to determine whether the ADR process is a good option, and if so, whether mediation or arbitration will give you the best chance of obtaining the outcome you desire while factoring in all other considerations, including time, expense, and evidence.

For further guidance, contact Willcox, Buyck & Williams, P.A. today for a consultation.


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