An Explanation of Mediation and Arbitration
Mediation and Arbitration are two methods of dispute resolution. This is a basic explanation of both methods for the layperson.
Mediation: can be voluntary or court-ordered. Both sides meet with an agreed-upon independent third party who acts as a mediator. The choice of mediator is not truly critical since he or she is not making any actual decisions regarding your case, but hopefully you will choose someone who has at least some experience in the personal injury field.
Each side has the opportunity to state their case and refute the other if wished. Many times the attorneys involved do not share all of their evidence simply because it is showing their hand before actual trial and there is no guarantee that the case will settle at mediation.
The parties then usually separate and the mediator goes back and forth between the two sides carrying settlement offers/demands and convincing arguments. The mediator will usually have the parties in attendance sign an agreement that anything said to the him (or her) during the negotiations is confidential and that he cannot later be subpoenaed to testify in the case.
Arbitration: this can be voluntary or court-ordered. This is usually binding, meaning that the Defendant is obligated to pay whatever the arbitrator awards, and the Claimant is obligated to accept. Obviously, your choice of arbitrator is much more critical than that of a mediator, so choose with care.
As with mediation, both parties will have the opportunity to state their case and refute the other if wished. They will also present evidence. Hold nothing back because the arbitrator will then assign a value to the case based in the evidence presented. If the parties have limited their risk of an extremely unsatisfactory outcome (to their side), there is usually some sort of high/low agreement in place before the mediation; this means that no matter what the award, the defendant will not pay more than the high agreed amount but no less than the low agreed amount. This sort of agreement usually protects both parties.
Either side may propose mediation or arbitration. A case need not be in suit to pursue either option. The advantage to both sides is that a case may be resolved more quickly and at a lower cost than if it were to go to trial. Also, these can be confidential matters, whereas litigation and a trial becomes public record.
This article is written for informational purposes and is not intended to take the place of competent local legal counsel.
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