MEDIATION

  Facilitated Negotiations

ARBITRATION

 Private Arbitrator decision

Third-party facilitates negotiations.  Parties control outcome

Usually final and binding-limited rights of appeal.

Judge and/or jury renders binding decision with rights to appeal.

Private, informal. Voluntary. By Agreement

• Private, more formal than mediation. Usually voluntary/sometimes statutory.   By Agreement/sometimes statutory.

Public, very formal. Legal/constitutional rights, including jury.  Non-consensual.

Informal rules and procedures.

• Relaxed rules of evidence and limited discovery. Governed by fixed rules and procedure which can be negotiated or tailored to particular dispute. Use of counsel is optional

• Governed by rules of court and rules of evidence.  Extensive discovery procedures.  Almost always requires legal counsel

• Creative Win-Win solutions are possible. Parties can select options that best meets their needs and interests

• Arbitrator(s) decide appropriate remedies. Creative solutions are not the norm. Awards/decisions enforceable in court of law.

Remedies are fixed, based on law, precedent and procedural requirements.

Cost effective and quick (weeks to months).

• Usually more cost-effective than litigation. Arbitration generally concludes within months of filing of demand/submission

• Usually not cost-effective in commercial/business disputes compared to alternatives.   Slow can take one to three+ years.

• Mediator usually selected/hired by parties because of knowledge, background, training and trustworthiness. Mediator is a conduit; motivator; evaluator; facilitator; communicator; process person and deal maker

• Arbitrator(s) usually has experience in subject matter and is neutral; objective; independent and mutually selected/hired by disputants

Judges/juries often lack expertise in subject matter of dispute.

Incentives

 - Resolving dispute in an informal businesslike manner

• - Direct involvement of disputing parties
• - Maintaining control over outcome
• - Cost and time savings, fast and economical
• - Maintaining a continuing relationship
• - Benefit of knowledge; expertise and experience of     the mediator
• - Early case evaluation and assessment

Incentives:

         - Resolving disputes expeditiously in a less formal, businesslike setting than litigation

• - Dispute resolved by neutrals with expertise
• - Minimize loss of goodwill
• - Private
• - Lack of appeal brings dispute to a final and binding resolution
• - Cost and time savings

 Incentives

Decision/outcome appeal able

Can have effect of precedent

“Stronger” side has decided advantage in forcing favorable settlement

copyright 2001 Kuniyuki & Chang