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Edition: March 2008
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Understanding the
Difference Between Arbitration and Mediation
By: Mark Eisenberg
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.
These days, there are numerous private mediation centers including, but not
limited to, at least in the Southern California area, AAA, JAMS, Judicate
West, and IVAMS.
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.
Private organizations like AAA, JAMS, Judicate West, and IVAMS similarly
offer arbitration services.
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.
Arbitration proceedings are usually considerably shorter than a trial and
will often be less expensive though that is not always the case.
The major drawback to arbitration is that you have trusted the outcome of
your case to a single trier of fact giving up your right to a jury.
This may be fine in some cases however, where passion and prejudice may play
a role in how the case is decided, it may be advantageous to you, depending
on which side of the case you are on, to try the case to a jury of twelve.
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 &
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.
For that reason, at EISENBERG LAW GROUP we work hard to resolve disputes
before trial. This is not to suggest that we at EISENBERG LAW GROUP avoid or
shy away from trial.
Quite the opposite! Messrs. Day and Eisenberg have over 30-years combined
trial experience and a fabulously successful track record for favorable
outcomes.
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.
For these reasons, we at EISENBERG LAW GROUP consider use of all available
forums for resolving your dispute placing your interests above all else.
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