Mediation, Arbitration, or Litigation?

Litigation is far and away the most well-known form of legal dispute resolution. We know what lawyers and trials are from the time we are children, and reports of the latest lawsuits and class actions constantly leak from the television, radio, and internet. However, while litigation may prominent, it is not always the best option. Sometimes, it makes more sense to resort to mediation or arbitration to settle a legal issue.

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Why Choose Arbitration or Mediation Instead of Litigation?

Litigation is never a simple or minor matter. Lawsuits are time consuming, emotionally draining, dauntingly complex in terms of the language they use and the rules they adhere to, and have the potential to become hugely expensive. For any or all of these reasons, businesses who find themselves at odds with one another may wish to try their hand at reaching resolution via mediation or arbitration before miring themselves down in court. Mediation and arbitration are both cheaper than pursuing full-blown litigation — sometimes by vast margins — and, they tend to move along and come to a close at a much faster clip than a lawsuit typically will.

What Happens in Mediation

Mediation sessions are usually overseen by a single mediator, who is generally either an attorney, or, where family law is involved, a mental health professional. Mediation is typically non-binding, and the mediator acts not as a judge, but as a sort of moderator who helps guide the conversation between the two parties.

Mediation is confidential, meaning that any documents or information revealed during mediation cannot be used outside of the mediation — including during litigation, if it comes to that down the line. The informal nature of mediation, coupled with the security of knowing all comments are confidential, tends to allow for frank and transparent discussion between the parties in conflict. However, it is legally allowed to have an attorney present during the mediation if so desired.

In an additional financial perk, the mediator’s fee — which is already much lower than expenses derived from litigation — is split between the two parties, resulting in a half-price payment for each party.

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What Happens in Arbitration

Arbitration is something of a bridge between mediation and litigation, more legally intensive than the former, but still less costly and more rapidly-moving than a lawsuit. Arbitration can be overseen by one arbitrator, but it is more common for each side of a dispute to have their own arbitrator, the two of whom select a third overall arbitrator in turn. The arbitrators act similarly to judges and are unlike mediators in that they have the power to review evidence and make decisions, which are legally binding. Whatever decision the majority of arbitrators makes — two out of three — is the final outcome of the arbitration. Arbitrators are typically selected from a given list by the parties in conflict.

If your business is involved in a legal dispute and you are interested in discussing litigation, mediation, or arbitration, contact Berkowitz Klein today.