“Don’t take the law into your own hands: you take ’em to court.” We have all heard that familiar catch-phrase from the TV show People’s Court. But, People’s Court was not actually a “court” – it was a binding arbitration between the parties. (By the way, in cases where the plaintiff won, the producer paid the judgment. But, that’s a story for another day.) So, what is arbitration? What is mediation? How are they different from a court trial?
Mediation and arbitration are two types of alternative dispute resolution. With court back-logs that are growing, and jury verdicts that are increasingly stingy, mediation and arbitration provide a unique opportunity for the parties to a lawsuit to resolve their differences without a trial.
Mediation is a non-binding settlement conference between the parties, with their attorneys, and a neutral third party. The mediator is typically a retired judge or an attorney that specializes in mediating disputes. It is not the mediator’s job to decide the case. The goal of the mediator is to help the parties reach a settlement that is acceptable to both sides. Good mediators are effective at finding creative ways to bridge the differences between the parties. Mediation is much less formal than a trial. The parties select (and pay for) the mediator and the mediation date. The mediation takes place in the mediator’s office, rather than the court. There is no evidence and no testimony. The attorneys make presentations to the mediator to describe the case. The parties (with their respective attorneys) are then placed in separate rooms. The mediator then shuttles between the separate rooms, with offers and counter-offers, until a settlement is reached or it becomes clear that a settlement is not likely. If the mediation results in a settlement, then the lawsuit is over. If there is no settlement, then the lawsuit proceeds to a court trial.
Arbitration is a hearing that results in a binding and enforceable decision. The arbitrator is typically a retired judge or an attorney that specializes in arbitrating disputes. Arbitration is more formal than mediation, but less formal than a trial. The parties select (and pay for) the arbitrator and the arbitration date. The arbitration hearing takes place in the arbitrator’s office, rather than the court. There is no jury. The parties present evidence and testimony to the arbitrator, but the rules of evidence are less strict than a trial. The arbitrator then issues a decision, typically within 30 days of the hearing. There are several benefits to arbitration. It is an effective way to obtain a speedy resolution of a claim. And, the parties are free to pre-agree on the parameters of the arbitration decision. For example, the parties may agree to what is called “high-low” arbitration. In “high-low” arbitration, the parties agree that the plaintiff will receive no less than a set minimum amount and no more than a set maximum amount. The high and low parameters are negotiated in advance. This guarantees the plaintiff a minimum award, while protecting the defendant (or the defendant’s insurer) from an excessively high award.
The attorneys at Beauregard, Burke & Franco have mediated and arbitrated hundreds of disputes for clients, resulting in substantial settlements and arbitration awards. Call us to discuss the best approach to resolving your dispute, whether it is a contract issue, real estate dispute, employment problem, or serious bodily injury.
by Michael Franco, Esq.