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Published: 2008-03-26

Mediation vs. Arbitration vs. Litigation: What's The Difference?



Everyone in our society is familiar with litigation and its ramifications. One party hires an attorney and files a lawsuit requiring the other party to also hire an attorney and defend the lawsuit. Anyone who has ever been involved in litigation knows that it is expensive, time consuming, emotionally draining and unpredictable. With litigation, until a judge or jury decides who is right and who is wrong, you are never certain of the outcome. Alternative dispute resolution, including arbitration and mediation, has been gaining popularity as a method to remedy some of the shortcomings of litigation. However, there is some confusion by the general public as to the difference between arbitration and mediation.

Arbitration and mediation are similar in that they are alternatives to litigation, or are sometimes used in conjunction with litigation to attempt to avoid litigating a dispute to its conclusion. Both arbitration and mediation employ a neutral third party. Both can be binding; however, it is customary to employ mediation as a non-binding procedure and arbitration as a binding procedure. Arbitrators generally act similar to a judge and make decisions about evidence and give written opinions, which can be binding or non-binding. Although arbitration is sometimes conducted with one arbitrator, the most common procedure is for each side to select an arbitrator and for those two arbitrators to select a third arbitrator. The dispute is then presented to the three arbitrators chosen, with a majority of the arbitrators rendering a written decision.

Mediation, on the other hand, is generally conducted before a single mediator who does not judge the case but helps facilitate a discussion and eventual resolution of the dispute. Mediation has most recently been re-discovered across the country, and in particular in Florida, a leader in the implementation of mediation, where almost all lawsuits are required to be mediated before a court will allow them to be put on the trial calendar. Mediation has been found to be effective in resolving approximately 75% of all cases and greatly reduces the trial docket of courts throughout Florida. Mediation enjoys such a great success rate partly because the parties are brought together in a neutral environment where they can freely and confidentially present their position in front of a neutral third party who then attempts to limit the issues and put them in perspective. Participants often feel much better after having an opportunity to get things "off their chest", and also benefit from hearing the other party's point of view, because as they say, "there are always two sides to a story."

Mediation can be used for literally any kind of dispute and there is no need to wait until a dispute results in a lawsuit and is ordered to mediation by a judge. Pre-suit mediation is becoming more widely accepted as a sensible way of resolving disputes before they turn into litigation, especially when the parties are motivated to resolve their dispute without the extra incentive created by a lawsuit. Besides being confidential and non-binding, mediation is relatively quick and inexpensive when compared to actually litigating a dispute.

The State of Florida has established a procedure for certifying mediators which generally requires a mediator to be a member of the Florida Bar who has attended a course of instruction on mediation, followed by an apprenticeship. While in a non-court context anybody can be selected to mediate a dispute, the use of a Florida court certified mediator insures a minimum level of expertise and experience and is probably the only real option available for parties wishing to mediate pre-suit disputes.

Please note that while most certified mediators are attorneys (family law mediators can also be accountants or mental health professionals), they will not give legal advice during the mediation and do not make legal conclusions about the merits of either party's position. However, if the parties come to an agreement, the parties themselves will put the agreement in writing and sign it so that it then becomes a binding contract.

Those wishing to mediate a dispute should enter into a simple contract. The parties should agree that the mediation be confidential and non-binding. The parties should also agree on who will conduct the mediation and how the mediator will be paid, which is generally borne equally by each party. An additional requirement that is implied is that the parties agree to mediate in good faith until such time as either party determines that it is fruitless to continue. If the parties cannot reach an agreement, the mediation will result in what is known as an impasse.

If parties have a dispute that they think may be appropriate for mediation, they may wish to contact an attorney to further advise them about mediation vs. litigation and about locating a mediator. If the parties are without counsel and wish to mediate on their own, the Florida Bar Association should be able to tell them which lawyers in their area are certified mediators. They can then contact a mediator and schedule an appointment. Most mediations will require several hours of a mediator's time in order to get through the preliminaries and make any real progress. More often, mediations are scheduled as either half day mediations or full day mediations. The current cost of the mediator generally runs between $150.00 to $200.00 per hour, which is split by the parties.

In conclusion, the use of mediation is an attempt by society to get back to the old traditional ways of resolving disputes, where people attempt to resolve their differences between themselves rather than relying on the judicial system. Mediation is highly effective, and while it has been under-utilized for quite some time, it has now become a permanent part of the litigation landscape. The use of pre-litigation mediation will no doubt become common place.