In many instances, disputes between parties will work out their differences by a discussion. If that fails, the parties may head to court. However, there are some options to resolve the issue before spending the time and money to go through litigation. Mediation, arbitration, and alternative dispute resolution are terms that many Arizonans have heard, but only a few are likely to understand exactly what they are and the difference between them.
Alternative Dispute Resolution (ADR) is a broad term that encompasses any type of procedure for settling an issue other than by litigation. Arbitration and mediation are two kinds of alternative dispute resolution, but there are more than just these two. In addition, there are different forms of arbitration and different forms of mediation. These alternative dispute resolution procedures aim to arrive at a resolution to a dispute.
Mediation is an informal type of alternative dispute resolution. An impartial third-party (the mediator) facilitates the disputing parties in finding a mutually satisfactory solution to their issue. An experienced mediator will counsel both parties toward a mutually agreeable settlement clarifying each side’s underlying interests and concerns. He or she will encourage compromise, considering the relative importance of each interest to the party.
The main point of mediation is that the mediator does not have the authority to impose a specific result on the parties—the mediator does not have the authority to make legally binding decisions. In mediation, when a settlement reached, it is recorded as an agreement signed by the parties, similar to any other contract. This settlement agreement does not have the same legal force as an arbitration award.
The alternative dispute resolution attorneys at Murphy Cordier Casale Axel PLC recommend mediation when the disputing parties maintain some sort of cordial relationship. That usually means that they are both willing to negotiate and prefer to settle the dispute between themselves without a third-party making a final decision.
Arbitration, in contrast to mediation, is a procedure in which the disputing parties agree to allow an unbiased, neutral, third-party (or group of third-parties) to act as the judge to resolve their dispute for them in a private setting, rather than in a public courtroom. Arbitration is, in effect, a stripped-down version of a trial usually with fewer and simpler rules and procedures. Arbitrators are allowed greater flexibility than trial judges to determine the way in which an arbitration should proceed and the weight evidence should be given. An arbitration permits the parties to present their arguments and evidence, then the arbitrator decides the winner and the terms of the decision.
When parties agree in advance to “binding arbitration,” the decision of the arbitrators, known as an arbitration award, is enforceable in a court of law if the losing party fail to adhere to the conditions of the award. While binding arbitration is closer to litigation than it is mediation, it has very limited rights of appeal after an arbitrator makes an award.
At Murphy Cordier Casale Axel PLC, we help our clients navigate through the arbitration process. Working with one of our skilled arbitration lawyers is a great advantage and provides clients with a much better opportunity for a successful outcome.