Every year millions of people go through some sort of litigation. Only a small percentage of those people ever see a lawsuit or the inside of a courtroom. Many of these ligation cases go through some sort of mediation or arbitration before the case ever goes to court.
But many do not know the difference between mediation and arbitration. For those not in the know let’s define the two. Both mediation and arbitration are forms of what is called Alternative Dispute Resolution (ADR), ADR can be defined as settling disputes without having to go through litigation. Please be advised that there are also other types of ADR besides mediation and arbitration.
Mediation can be defined as an informal process where an impartial third-party, called the mediator, helps the two disputing parties find a mutually satisfactory solution to their problem. The mediator’s job is usually to find ways to clarify underlying interests and concerns to each of the concerned parties’ problems with the current situation.
After a mutually decided outcome is secured, both sides sign an agreement similar to a contract and the agreement is legally binding. Mediation is most commonly used when both sides are still on good terms and do not want a third party entity being the one to make the final decisions.
Arbitration is when two parties agree to have an unbiased, neutral, third party to act as a judge and jury to resolve their dispute outside of the courts. The third party is called the arbitrator who usually has more flexibility than judges regarding when and how the case should proceed.
It is the arbitrator’s job to weigh the evidence from both sides before making a final decision on the case. However, once the decision is made both parties are legally bound to follow the word of the arbitrator. In many cases there is little chance of appeal after the arbitrator has made a decision.
While both types of ADR are commonly used to avoid litigation both have their pros and cons. If you or someone you know is looking into mediation and/or arbitration, the Law of Office of Edward Lai can help.
For a consultation on your case you can visit our website here or call 510-397-8287.