Mediation is a form of alternative dispute resolution involving the services of a mediator. The process of mediation is voluntary and no party is forced to agree to a settlement. The mediator is an independent, neutral party that works to resolve a dispute by facilitating communications between the parties. It is a private and informal dispute resolution process where the mediator assists disputing parties in reaching an agreement that resolves their dispute. The terms of the settlement are mutually decided by the parties, not by the mediator.
After mutually agreeing to hire the mediator, a hearing date is established. The parties may, but are not required to, provide documentation and/or evidence to support their position. The mediator coordinates the negotiation process but does not have any authority to make a binding decision. When settlement is reached, the mediator will assist in drafting the settlement terms that resolve the current problems and meet the needs of the disputing parties. Then the terms can be taken by the parties to an attorney for legal preparation of a contract.
Arbitration is another form of alternative dispute resolution. The purpose is to resolve a dispute privately using a neutral third party who will be the decision-maker. It provides a forum in which the parties to a dispute present their cases to an arbitrator or panel of arbitrators for a decision.
Arbitration has certain advantages over litigation. Generally disputes can be resolved in a more expeditious and less costly manner. Arbitration is less formal than litigation and is a private rather than public proceeding. Arbitrators can be selected for their technical expertise in a subject where judges often lack expertise in construction, architecture and engineering. The award decision of an arbitrator is more likely to be final. This feature will appeal to businesses who wish to avoid costly appeals that prolong the litigation process.
In arbitration, each party has a right to call witnesses and present evidence in support of their case. Each side will be allowed to question the other party, their witnesses, and evidence. After the cases and evidence have been presented, the arbitrator will retire to review the case and prepare the decision. In binding arbitration, any award rendered may be enforced in a court of law. Because of the presumption of enforcement of the arbitration the courts will review each case very carefully and the specific arguments to determine if there was something in the proceedings such as fraud, corruption, misconduct or a prejudicial mistake, requiring the invalidation of the award.