Not every legal dispute has to be settled in front of a judge.
The world of alternative dispute resolution allows people to work out their issues outside the courtroom, often through a third party who acts as a mediator.
But more and more cases are being settled through another form of alternative dispute resolution. The most common forms of alternate dispute resolution are arbitration and mediation.
What is arbitration?
Like mediation, arbitration is a method of settling a legal dispute by putting the matter before a third party outside of a courtroom setting.
In mediation, the mediator’s goal is to assist the parties to reach an agreement to resolve their dispute. Mediation is purely voluntary. At any stage of the mediation process, either party can walk away to pursue his or her case in court. Arbitration is different. It is closer to traditional litigation because the arbitrator will decide on the outcome. Once the parties submit to arbitration, they cannot simply end the proceedings if they are uneasy about the process. Generally, once the arbitrator enters his or her decision, that decision is generally binding and final. The grounds for appeal are very narrow.
Still, arbitration is less formal than a trial, with more relaxed rules for presenting evidence and more relaxed rules for pre-trial discovery. Arbitration results in a binding outcome – which means that except for very narrow exceptions, neither side can appeal the outcome. In mediation, if the mediation succeeds in bringing about an agreement, it is the agreement of the parties that determines the outcome of the dispute.
ADR is a good solution for people who want to avoid the cost and time of going to trial and for complex cases where both parties would feel better having a decision maker who has experience with the matter in question.
However, you might find that arbitration isn’t a good fit for your dispute, particularly in cases where you want some level of control over how the outcome is decided.
What are the benefits of arbitration?
The benefits of arbitration include:
- Both parties in arbitration typically agree on their arbitrator, meaning both sides can have confidence they’ve chosen someone who’ll be fair.
- It’s quicker than litigation. Once you’ve chosen an arbitrator, they can begin hearing arguments right away. With litigation, you’ll be on the court’s schedule.
- It typically costs less. It costs less to prepare for arbitration than to prepare for a trial. Because the rules of evidence are different, the two sides can submit documents instead of calling witnesses, meaning you won’t have to hire expert witnesses. And in arbitration, the two sides typically agree to split the cost of hiring the arbitrator.
- Arbitration is more private than a courtroom proceeding, meaning you can keep the dispute and its outcome confidential.
- For the most part, binding arbitration means neither side can appeal, meaning that once the case is decided, it’s over. It gives some finality typically not found at trial.
However, that leads us to one of the things you should consider before agreeing to arbitration:
- If you’re unhappy with the outcome of a binding arbitration, there isn’t much you can do.
- It might not always be cost-effective. If there’s only a small amount of money at stake, then hiring an arbitrator might force you to spend more than you’d get back.
Does arbitration or mediation seem like the right move for resolving your company’s legal dispute? Turn to Benner and Wild.
Our team is experienced in facilitating ADR proceedings and can help you in deciding these matters. Contact us today to start the conversation about your dispute and how we can assist you in reaching a resolution that works for you.