Mediation and arbitration are both methods of alternative dispute resolution (ADR), ways to resolve disputes short of going to trial. ADR procedures can be initiated by the parties or may be compelled by legislation, the courts, or contractual terms. They are often used in personal injury claims here in Georgia, but they are not limited to that area. Many people confuse the two processes. If you are about to enter either arbitration or mediation, it is essential that you understand what to expect.
What Is Arbitration
In arbitration, you and the other party present your case to an arbitrator or panel of arbitrators. In Georgia, general arbitration is governed by O.C.G.A. section 9-1-1 et seq.. Typically, a party will send the other party a notification of their intent to arbitrate a dispute. The served party responds, arbitrators are selected, and the hearing is scheduled. Often the parties have some say in the selection of arbitrators. The arbitrator or panel of arbitrators decides on the merits of the issue after the hearing. Often the decision is final, though sometimes there are some limited possibilities to appeal.
People sometimes choose arbitration, because it is both faster and cheaper than going to trial. Though it bears many similarities to a trial in that evidence is presented and witnesses are called, the process is much more streamlined. Also, of course, there is never a jury in an arbitration.
Unless compelled by a statute or a court, to go to arbitration, the parties need not go to arbitration unless both parties agree. Of course, some business contracts contain language where the parties agree to arbitrate rather than go to trial. These contracts may or may not be enforceable.
Forced arbitration is usually a bad deal for consumers. That is because the arbitrators are typically “pre-selected” by the fine print of a long “contract” written by the defendant. That means two things. First, the defendant-company usually selects an arbitrator that it believes will be friendly to the company at the expense of the consumer. Second, arbitrators—who only make money when they arbitrate cases—want to keep being selected by companies so they have every incentive to decide in favor of the company, not the consumer.
What Is Mediation
Unlike arbitration, mediation is more of a guided negotiation between the parties. A court may order the parties to attend mediation, or the parties might agree to attend mediation. The mediator helps define the issues and guides the process.
The mediator is there to facilitate discussion and communication, and to assist the parties in finding common ground to arrive at a realistic compromise. The mediator makes no decisions and remains neutral. They may also suggest solutions and help draft a settlement.
Many courts require parties to go to mediation before going to trial. If the parties cannot agree on a solution, they can then still go to trial or even try a second mediation.
Boiling Down the Difference Between Mediation and Arbitration
Mediation is essentially a guided negotiation process. The mediator makes no decisions and cannot force you to do anything. Courts often require mediation as a last-ditch attempt at a settlement before you go to trial. If mediation doesn’t work, you can still litigate. Arbitration, on the other hand, is used in place of trial. An arbitrator or arbitration panel will reach a decision, and you have limited rights to appeal. If you have questions about either mediation or litigation, do not hesitate to call your local Georgia attorney to discuss whether one or the other would be helpful in your situation.