Litigation is not the only option when it comes to reaching a settlement with another party. Litigants can agree to other means such as mediation or arbitration to reach an agreement that’s fair for both sides. Unfortunately, once a complaint goes to trial, a judge or jury will have the final say in terms of damages paid, injunctions, and other rulings.
During a trial, both sides will be able to present evidence, but will not have any negotiating powers. And while an appeal may be filed after a ruling, there is no guarantee the appeal will be granted.
Reasons to Consider Mediation or Arbitration
In addition to being able to negotiate freely with another party, mediation and arbitration cost less than a trial. Depending on the complexities of the case, litigation can last a year or more. For many individuals and businesses, the time spent in building a case can cost money – the cost of legal fees can also cost a lot depending on the type of research and time needed to adequately prepare for a trial.
Another reason why those involved in litigation should consider mediation or arbitration is the amount of time it will take to reach an agreement both parties can be satisfied with. In most cases, it may only take a day or a week to reach an agreement. A courtroom trial can take a month or more depending on the scope of the suit (on top of months of pre-trial preparation). For businesses and individuals that want quick resolution, mediation or arbitration may be the best course of action.
Mediation vs. Arbitration
Though similar in approach, agreements reached through mediation are usually non-binding. This means that either party may reconsider the agreement at a later date and reschedule another session or continue with a trial. Arbitration, on the other hand, is usually binding. This means that both parties are legally responsible for holding up their end of the agreement. If not, then the suit will go to trial and those that did not adhere to the agreement reached may suffer additional penalties.
The Mediation Process
The mediation process is fairly simple. Both parties meet (with or without their attorneys present – this depends on the wishes of both parties) with a professional mediator who has no stake in the outcome of the process. Using a third-party to negotiate an agreement helps ensure fairness for everyone throughout the process.
During the session(s), the mediatorwill ask both sides to describe the issue and potential resolutions. The mediatorwill then guide both parties to reach a ‘middle-ground’ through further negotiations. If no agreement can be reached after a certain amount of time, the mediator will continue to work with the parties or may recommend pursuing the litigation process.
If an agreement is reached, both parties will sign a non-binding or binding contract drawn up by the mediator/arbitrator. Contracts typically include all points reached in agreement, payment deadlines, and other details agreed upon by both parties.
The Arbitration Process
Arbitration is quite similar to going to court. However, arbitration is generally more streamlined and moves faster than traditional litigation. In an arbitration proceeding, the parties agree to have a neutral third party, called an arbitrator, to decide their claims. Arbitrators are usually former judges or established practicing attorneys and are often retained via organizations such as the American Arbitration Association.
Once an arbitrator is selected, both parties present their case to the arbitrator. Usually, there will be written materials, but there may be no oral argument at all. The arbitrator makes a decision based on the pleadings alone in many cases. Arbitration may be binding or non-binding, as the parties may agree in advance. Non-binding arbitration is often used when one or both parties wants to “test” their case and how it may play in a formal courtroom. Binding arbitration is usually employed when the parties can’t agree on a settlement, but can agree to have a third party make a final decision about their dispute.
Most formal courts strongly prefer that any agreements about binding arbitration stand. Accordingly, parties should usually not agree to a binding arbitration arrangement unless they are comfortable with the dispute being fully resolved via the arbitration process.
The Lexero Law Firm
Mediation and arbitration can be rigorous processes that require the ability to carefully negotiate each detail of a lawsuit. It also requires the know-how to “give and take” with other parties involved. If you want to avoid a trial, contact Lexero Law Firm today to learn more about the alternatives to litigation. My firm can help you negotiate the best deal possible to save time and money compared to a lengthy and costly lawsuit.