Options in Dispute Resolution: Mediation, Arbitration or Litigation?
When it comes to disputes resolution it’s sometimes hard to make the correct decision on what route to follow. Some contracts state that the parties must “mediate” a dispute before “litigation” or “arbitration.” By Tanya Steynfaardt
Mediation – parties will be assisted, with the help of a mediator, to reach a resolution of the dispute. The role of the mediator is to listen, ask questions and to try to get a settlement between the parties. Mediators is always impartial; the mediator is not allowed to take any sides and always need to be unbiased. The mediator is not a decision-maker, but some mediators will offer their opinion regarding the likely outcome. The benefits of mediation can be – quicker resolutions of the dispute, and it is generally a more cost-effective option to follow. The parties are also in control of the outcome. Mediation can also be done with both parties’ attorneys present. If the mediator is not able to reach an agreement, they refer the matter to litigation.
Litigation – is the process of taking legal action. Litigation is generally thought of as the process of resolving rights-based disputes through the court system, from filing a lawsuit through arguments on legal motions that include a discovery phase involving a formal exchange of information, courtroom trail and appeal. Litigation also encompasses administrative or regulatory processes for establishing legal rights and resolving disputes. The role of the attorney is to defend the client and to advise them regarding legal rights and steps to follow. Litigation can be time consuming and expensive. In some cases, litigation is the only resolutions for disputes.
Arbitration – is a procedure in which a dispute is submitted, by agreement of the parties, to one or more arbitrators who make a binding decision regarding the dispute. In choosing arbitration, the parties opt for a private dispute resolution procedure instead of going to court. Arbitrators are experts on the subject of dispute and have had formal training in arbitration. Many, but not all, arbitrators are lawyers. Examples of remedies that may be awarded by an arbitrator include: The payment of a specific sum of money, called “conventional damages”. An order for a party to the proceeding to do, or not do, something – called “injunctive relief”. Arbitration is often used for resolution of commercial disputes, particularly in the context of international commercial transactions. In effect, binding arbitration takes the place of a court trail. If the losing party to a binding arbitration doesn’t pay the money required by an arbitration award, the winner can easily convert the award into a court judgement that can be enforced just like any other court judgment.