Arbitration and mediation is an alternative conflict resolution (ADR) where a third (3rd) party is asked to assist in a disagreement settlement, such as when someone violates an NDA. A definitive settlement is not reached under both forms until both parties agree. We will take a closer look at the difference between mediation and arbitration through going into more detail about each approach.
Arbitration is similar to going to court with less formality and cost. The parties employ one or more arbitrators to examine the dispute and make a decision, instead of filing a lawsuit. The process of arbitration may be relatively simple; typically, some document preparation and a hearing are involved in the arbitration. A lawyer doesn’t need to arbitrate, but many parties use lawyers to assist in making the strongest legal arguments.
The decision of the arbitrator may be advisory (in which case any party may ignore it and file a lawsuit) or may be binding. A binding ruling can be imposed by a court and can not be reversed unless anything extremely unjust has happened-the arbitrator ruled against you, for example. You then find that the arbitrator held shares in the business of your opponent.
- It is less costly than a trial.
- Within several months, arbitration can be concluded. It is likely to pursue litigation for many years.
- With professional expertise, you can employ an arbitrator. For example, regarding (if necessary) patents.
- If you specify it in your arbitration clause, there is no right to discovery (the mechanism by which the parties must share details about their cases).
- By going to arbitration, it could be possible to seek immediate relief sooner.
- There is no request for a binding decision on arbitration. Only if you can show that the arbitrator was biassed or that the decision undermined public policy can it be set aside?
- You must charge the arbitrators; the fees are often $10,000 or more. Lawyers are typically needed, but their fees are likely to be lower than if you are suing in court.
A neutral evaluator (the mediator) aims to help the parties find a settlement of their conflict during mediation. With the mediator, both sides sit down and share their storeys. The mediator informs ways to settle the conflict, and the two sides attempt to agree. When they do, they sign an enforceable consent agreement. Since it is not binding and because it is less costly than litigation or arbitration, some organisations, at least as a first step, prefer mediation.
Mediation is the most cost-effective and peaceful form of problem-solving. Rather than being told how to handle the conflict by an arbitrator or judge, you should arrive at a settlement. As lawsuits eventually do, it’s less likely to escalate bad feelings between the parties. Mediation, however, is also not enough on its own, since it does not compel the parties to resolve the conflict. If the conflict with the mediation will not be settled, you must find a binding means of settling the war, either arbitration or litigation. Often, to buy more time, one party prefers mediation.
If your conflict is related to your business and employees it is advisable to employ an employment lawyer to facilitate the communication and mediation between employers and employees.