ADVANTAGES OF MEDIATION
The following compares litigation, arbitration and mediation.
- Formal process
- Formal rules of evidence
- Formal discovery
- Public record
- Judge/Jury makes decision
- Verdicts final, subject to appeal
- Expensive and time-consuming
- Less formal process
- Rules of evidence relaxed
- Limited discovery
- Hearings are private
- Arbitrator makes decision
- Decisions are binding
- Limited appeal rights
- Somewhat less expensive than litigation
- Least formal process
- Rules of evidence do not apply
- Informal fact-finding
- Private and confidential
- Mediator guides parties to their own decisions
- Parties decide whether to settle
- Settlement agreements are enforceable contracts
- Faster, cheaper, and less stressful than arbitration or litigation
What are the disadvantages of litigation and arbitration?
Time and Money
- Litigation – a courtroom trial – requires many hours of an attorney’s time over many months or years, taking depositions and other steps to learn about the other side’s case.
- Litigating even the simplest of disputes costs $10,000 to $20,000 and in more complex cases, it costs more — much more.
- Arbitration is usually a little faster so it normally costs less than a court trial, but there are no guarantees it will be faster or cheaper.
- As a way to resolve conflicts, they are both expensive, inefficient and can permanently destroy relationships.
- In litigation, a judge or jury declares a winner and a loser and awards a judgment to the winner.
- As recent high-profile trials have shown, juries are very unpredictable.
- In arbitration, the arbitrator acts as a judge, considering the evidence, deciding who wins, and entering an award – sometimes neither side is happy with the award. Then, the award must be filed with a court to be enforced like a judgment, but unlike a judgment the loser has little chance of appealing an unfavorable arbitration award.
Loss of Control
- In both litigation and arbitration, control of the result is given to a third person or persons with no stake in the outcome.
- Control of the process is held by the lawyers who can only interact with their own clients and with one another.
- Personal contact between the disputing parties is lost, increasing their feelings of alienation and resentment toward one another.
- “Winning” the case in court or at arbitration does not guarantee an end to the dispute.
- Most judgments and awards require the loser to pay money to the winner, but getting the money is not automatic.
- Though rarely successful, there can be appeals. Even without an appeal, more trips to court are often required to locate the defendant’s assets, to attach liens to the assets, and to foreclose on those liens. Worse still, if the defendant declares bankruptcy, all those trips may be for naught.
- Since most court proceedings and records are open to the public, there is no privacy in litigation; business secrets, family secrets, embarrassing details about your life all could be in tomorrow’s newspaper or on the evening news.
- Whether declared a winner or a loser, both sides lose. They lose control over the process and the outcome, they lose relationships with others, and they lose the money spent fighting the other side.
Why is mediation an advantage over other methods?
Fast and Efficient Since an average mediation takes a single day, the efficacy of this method speaks for itself. A trial attorney’s time spent on the deposition of a single witness may take longer than the entire mediation, but depositions don’t settle cases.
Control Since the whole process is voluntary, the parties have complete control over the outcome; if they don’t agree, there is no resolution and their other options are still available.
Finality Most disputes we mediate end in agreements which are honored by the parties. Compare this with only 50% compliance with court-ordered judgments. Why? Because both parties reach their own agreements, not a third party.
Win/Win Mediation can provide creative solutions you just can’t get from a judge or an arbitrator. Solutions like increased orders for products, a bonus, a training program for employees, or simply a sincere apology. Or it could be an agreement for one party to stop doing something like mowing their lawn at 6:00 a.m., something a judge would not order them to stop doing. Relationships are often preserved, healed, even strengthened.
Privacy & Confidentiality The process is completely private and confidential. This allows people to openly discuss issues without the possibility of public exposure.
Peace Mediation usually results in a better understanding between people, which leads to peace. Clearing up misunderstandings promotes the peaceful resolution of most disputes.