FAQ: MEDIATION VS.

ARBITRATION
By Paul Bielaczyc
What is mediation?
Mediation is a voluntary, interactive process where a neutral, third party, trai
ned to facilitate communications and with negotiation skills, helps all the part
ies try and reach a mutually acceptable resolution to their dispute. In litigati
on, the judge issues orders on what is to be done during the course of the case.
The mediator has no reciprocal powers. In mediation, the parties, with the help
of the mediator, work together and decide how to resolve the dispute.
The mediation discussions by the participants are confidential, based on Califor
nia law. Statements made and documents presented in the mediation may not be use
d in any later proceeding. With litigation, many aspects of the case become publ
ic record. Court litigants have to virtually surrender all elements of privacy r
egarding their dispute. If the mediating parties are unable to reach an agreemen
t, the mediation process gives them the chance to narrow the issues in the case
should they later select litigation.
Mediation reduces costs to parties as it can eliminate the high expenses and fee
s associated with litigation. Exchange of information is voluntary. Mediation ca
n consume far less time and expedite settlement. This results in additional cost
s savings by reducing attorney time. There is also the derivative benefit to the
mediating parties as they are able to resolve their disagreement and reduce the
stress from uncertainty and costs associated with litigation.
What Happens During A Mediation?
The mediator introduces the process and then invites each side to explain the co
nflict from their own perspective. This allows the mediator to better understand
the dispute in order to ask questions designed to clarify the respective issues
that need to be resolved. The parties are advised that the mediation process i
s entirely voluntary, and that they may elect to end discussions at any time. Gu
idelines for appropriate conduct are detailed, often consisting of not interrupt
ing another person speaking, and being respectful to each others case perspectiv
e.
What is the Mediators Role?
The mediator is selected by the parties to act as a neutral facilitator to assis
t and guide them towards a case resolution. The mediator will not decide who is
right or wrong in the dispute. The mediator will not compel the parties or force
them into a settlement agreement.
A mediatorâ s technique and approach varies on a case by case basis. Commonly, the
mediation will begin in a joint session with all parties present to discuss the
issues face-to-face. The mediatorâ s role is to help maintain the parties focus on
these issues during the entire course of the proceeding. The mediator will then
hold private sessions with each side talking in greater detail about the respect
ive positions of each party.
The mediator will use the private session forum to exchange messages between the
parties, foster clarifications, carry questions and proposals to each side. The
mediator also uses the private sessions to facilitate negotiations by transmitt
ing offers and counteroffers between the parties. Throughout this process, the m
ediator must maintain confidentiality and neutrality, stay away from giving advi
ce, and not force parties into settlement, while facilitating communications wit
h the parties.
Should the parties be successful in reaching an agreement, the mediator can work
with the parties to draft the terms and conditions of the settlement. In some c
ases the mediatorâ s role will continue after the scheduled mediation by providing
help to complete the settlement agreement. Any agreement reached during the medi
ation is intended to be binding with to respect to the issues in dispute.
What happens if there is no settlement agreement?
The parties may end up unsuccessful in reaching an agreement, which many times t
hen lead to the filing of a lawsuit. However, the mediation then is a learning p
rocess, and one unsuccessful attempt does not mean the dispute must result in a
lawsuit being filed. If a lawsuit is filed after an initial mediation, the court
can offer mediation again to be considered by the parties before any trial by j
udge or jury occurs.
What are the costs and time involved to participate in Mediation?
The mediatorâ s fee can range from as low as $100.00 per hour and be as high as $50
0.00 per hour and higher based on a daily rate. This fee is divided equally amon
g the number of parties, unless another arrangement for payment is made. Where a
lawsuit has been filed, the mediatorâ s fee may be paid by the court, depending on
the amount in controversy and the county where the lawsuit is pending. The amou
nt of time to conduct mediation is never set to a limited quantity. Many cases,
depending upon the complexity of issues, may involve multiple sessions, with eac
h session encompassing 6-8 hours. Some mediations can be completed in as few as
2-4 hours.
What is Arbitration?
Arbitration is another Alternative Dispute Resolution (ADR) process where the pa
rties select an attorney or a retired judge to conduct a hearing. Witnesses are
sworn in, and testimony is presented. Evidence can also be offered by way of doc
uments and writings. The same rules of evidence admissibility in court are used
during the arbitration hearing. Once the case is presented by all sides, a dec
ision of the arbitrator is provided in order to decide the prevailing party on t
he issues of dispute. Although arbitrations resemble trials, they offer less fo
rmal procedures and the potential for abbreviated presentation of issues.
What are the advantages of arbitration?
Similar to mediation, arbitration as an alternative to litigation can allow for
the saving of time and money to resolve a dispute. The parties can set limits on
discovery and the issues to be decided by the arbitrator. These limitations can
affect who will testify at the arbitration and what type of evidence will be al
lowed. The parties have more control of the arbitration process compared to cour
t administered litigation, including where and when the hearing will be conducte
d. Monetary limits can also be set preventing an arbitration award from exceedi
ng a certain value or assuring that a minimum monetary recovery is obtained.
Are there different types of arbitration?
A dispute can be arbitrated because of the terms of a contract agreement. This t
ype of arbitration is usually recognized as binding, where no appeal of the arbi
trator decision is allowed. By contrast, a non-binding arbitration allows the pa
rties to seek some manner of appeal, often a request for a jury or judge trial.
Non-binding arbitrations more often then not arise from a lawsuit that has been
filed. Many times, non-binding arbitrations give the parties the chance to test
their case and obtain a neutral evaluation of the merits. This method of arbitr
ation can lead as well to negotiation for potential settlement instead of appeal
.
What are the costs and time involved in conducting an arbitration?
The fee of the arbitrator is often times similar to that of a mediator. Arbitrat
ors regularly charge $300.00 per hour and higher. These fees are shared equally
by all sides, unless another arrangement is made. Since the parties are able to
limit the potential number of witnesses and the breadth of testimony, they can u
sually set time limits on the length of the hearing. However, the amount of tim
e necessary to complete the arbitration is dependent upon the complexity of the
dispute.
____________________________________________________________
Paul Bielaczyc is an Attorney, an Arbitrator and a Mediator focusing his ADR eff
orts on all areas of general civil litigation. He is an approved panelist for th
e Santa Barbara, San Luis Obispo and Ventura Superior Court Mediation programs.
You may call Tri-County Mediation at (805) 565-8725 for more information or to v
iew the profile of Mr. Bielaczyc, go on-line to http://www.tricomediate.com or b
y going to the Santa Barbara County Superior Court CADRe website at http://www.s
bcadre.org/bielaczyc.htm.