Mediation and arbitration are two types of alternative dispute resolution that are often confused. Both are options for sorting out conflicts in construction defect cases, usually without having to involve a court of law. It is helpful to understand the differences between mediation and arbitration to decide which is most appropriate for a particular situation.
A mediator is a neutral person who facilitates communication between the parties in the dispute. Mediators have no decision-making power—he or she intervenes to help the parties reach their own mutually acceptable agreement. The process is usually a series of discussions and private meetings between each party and the mediator to negotiate an agreement. With the guidance of the neutral mediator, the parties decide on a resolution to the issue. The results of mediation are non-binding.
An arbitrator is a neutral third party agreed on by the disputing parties. The arbitrator has a role similar to a judge in a court of law. Like being in court, the arbitrator hears evidence presented by both sides in the case in the same room. The arbitrator makes a judgement, whether or not the parties come to an agreement on their own. The parties can choose whether the decision will be legally binding. In most cases, the parties choose binding arbitration which means the decision is final. In non-binding arbitration, if the parties disagree with the findings, they can find another way to resolve the dispute, which is either mediation or court proceedings.
When to Mediate and Arbitrate
Mediation can be held at any time, including during a lawsuit. Some contracts may require that parties use mediation to try to come to agreement before they can file a lawsuit or engage in arbitration for settlement. In some situations, once a case is filed in court, judges may encourage the parties to work with a mediator and come to an agreement on their own rather than take the case to trial.
In some instances, parties include arbitration as a clause in contracts, usually specifying which organization will be used to conduct any proceedings. The American Arbitration Association is one organization that provides arbitrators and standards.
Advantages to Alternative Dispute Resolution
Mediation and arbitration have advantages over taking a construction defect case through the court system.
As expert witnesses, we have extensive experience resolving construction related disputes, in court, arbitration, and mediation. Contact us today to learn how we can help you resolve issues more easily and cost effectively.
CCA, LLC DOES NOT provide any legal advice and users of this website and/or blog article should consult with their own lawyer for legal advice. The information found in this website and/or blog article is not legal advice and is for informational and/or educational purposes only. CCA, LLC is not a law firm and our employees are not acting as your attorney.