Litigation vs. Mediation vs. Arbitration – what is the best route for you?

By Matthew G. Stein, Esq.

As a trial attorney, I often advise my clients that cases are won or lost on the opening statement – after that, you have very little control in a trial. You do not get to choose the courtroom or the judge or the trial date. In fact, often there is such a backlog of cases, you may not be assigned a courtroom for several years. Trial dates can be pushed, courtrooms can go dark, and judges can ask you to come back months later – all of which you do not have the opportunity to control.

Litigation Mediation Arbitration

One of the major disadvantages of litigation is that it has become increasingly expensive and the reward for the prevailing party may be years away. Attorneys’ fees are difficult to afford and there are often costs for other services, such as court reporters or expert witnesses. Lawsuits can be dragged through the system with numerous pleadings, depositions, discovery, etc. Opposing parties can turn the matter into a war of attrition. Parties can become motivated to settle the dispute not based on the merits of the case, but based on the costs incurred relative to financial and emotional resources.

There is no regard for privacy in a court

Financial records may be exposed, as may proprietary interests, explicit behavior, even company secrets. While the information disclosed at trial will only be accessed by the public if someone’s listening or if a court reporter was retained, all the filings can be readily discovered by anyone who visits the court’s website.

As litigation becomes increasingly inefficient, alternative ways to resolve cases have become more popular. Two such options arbitration and mediation, are the most cost efficient and time saving mechanisms to settle disputes. In order to pick between the two types of dispute resolution structures, you must know the difference between them.

Taking a closer look at Arbitration vs. Mediation

Arbitration and mediation are similar in that they are alternatives to traditional litigation and sometimes they are used in conjunction with litigation. Please take note that this is different than negotiations. Often opposing parties may first try to negotiate, and if that fails, move forward to trial. Both arbitration and mediation employ a neutral third party to oversee the process, and they both can be binding or non-binding. Binding would require the parties to waive their right to a trial and be bound to the arbitrator’s or mediator’s decision. Non-binding would allow the parties involved to proceed to trial later on if not satisfied with the terms set during arbitration or mediation, meaning the decision would not be enforceable and each party is able to reject the decision.

Arbitration is generally conducted with a panel of multiple arbitrators who take on a role like that of a judge, make decisions about evidence and give written opinions. Although arbitration is sometimes conducted with one arbitrator, the most common procedure is for each side to select an arbitrator. Then, those two arbitrators select a third arbitrator, at which point the dispute is presented to the three chosen arbitrators. Decisions are made by majority vote.

Mediation, on the other hand, is generally conducted with a single mediator who does not judge the case but simply helps to facilitate discussion and eventual resolution of the dispute.

The Success of Mediation in Modern Litigation

Mediation has enjoyed increasing popularity as an important part of the litigation process. For example, in Florida, almost all lawsuits require mediation before a court will allow them to be put on the trial calendar. The reasoning behind this requirement, according to the Florida senate, is because mediation has proven effective in reducing court dockets and trials. It often offers a more efficient, cost-effective option to litigation.

Mediation enjoys such high success rates because the parties are brought together in an environment where they can freely and confidentially present their position in front of a neutral third party. Mediation attempts to limit the issues and put them into proper perspective. Participants often feel much better after having an opportunity to get things “off their chest,” and also benefit from hearing the other party’s point of view. The neutrality and more relaxed atmosphere of mediation may eliminate the desire to continue hostile litigation once both parties have seen all the issues in a fair light.

Mediation can be used for any kind of dispute; there is no need to wait until a dispute results in a lawsuit and is sent to mediation by a judge. Pre-lawsuit mediation is becoming more widely accepted as a sensible way of resolving disputes before they turn into litigation. Besides being confidential and non-binding, mediation is relatively quick and inexpensive compared to litigating a dispute.

Please note that while most certified mediators are attorneys, mediators will not give legal advice during the mediation and are not supposed to make legal conclusions about the merits of either party’s position. When the parties come to an eventual agreement, the parties themselves will put the agreement in writing and sign it so that it then becomes a binding contract.

How to get to Mediation? The Contract

If you want to mediate a dispute, you and the opposing party should enter into a pre-mediation contract.  This simple contract should include the following:

  • The mediation should be confidential and non-binding.
  • The parties should agree on who will conduct the mediation and how the mediator will be paid. The cost of the mediator is typically split between the two parties.
  • The parties should agree on the length of the mediation. Most mediation is scheduled for either a half-day or a full day.
  • The parties should agree to mediate in good faith until either party reasonably determines that it is fruitless to continue. If the parties cannot reach an agreement, the mediation will result in what is known as an impasse.

Where Should You Begin?

If two or more parties have a dispute that they think may be appropriate for mediation, they may contact an attorney to advise them on the benefits of mediation versus litigation, and to help them locate a mediator. If the parties like to mediate on their own without the help of attorneys, then they should contact their state bar association who will have a list of mediators to contact for an appointment. Alternatively, they can get in touch with a mediation and/or arbitration organization.

Mediation is a less hostile, less confrontational format for resolving disputes, where parties attempt to resolve their differences between themselves rather than relying on an inefficient, expensive, and time-consuming judicial system. Before your litigation advances, work with your attorney to determine if mediation is right for your case.

We are always here to be a resource, feel free to contact us for any questions you might have.