The Arbitration Process:
Arbitration is a voluntary dispute resolution process in which the parties select a third party, called the arbitrator, to make a decision regarding their dispute. Unless otherwise previously ageed by the parties, the arbitrator's decision, called an award, is final and binding and therefore cannot be appealed to any court.
The arbitrator typically hears evidence at a hearing conducted in an office or other informal setting. The arbitration process is conducted in accordance with any previous agreement of the parties or, if none, according to applicable state or federal arbitration rules. Unless the parties have previously agreed otherwise, the arbitrator has authority to decide the extent to which rules of evidence will apply and what remedies are appropriate.
Like mediation, the arbitration process is confidential unless it becomes necessary for the prevailing party to file the arbitration award with an appropriate court to seek enforcement. Once filed with the court, the award can be made an enforceable judgment of the court and be enforced the same as any other court judgment.
The Mediation Process:
Mediation is a voluntary dispute resolution process in which the parties use the help of a neutral third party, called the mediator, to try to reach a mutually satisfactory solution to their dispute. The decision-making power in mediation rests with the parties, not with the mediator.
The mediator is trained to help each party understand the others' positions and to help them arrive at possible solutions. Mediation works as a problem-solving process because the parties participate voluntarily and in good faith. Any of the parties, even the mediator, may withdraw from the mediation at any time and for any reason.
The parties meet with the mediator in an office or other informal setting to discuss their respective positions to the dispute and to negotiate a mutually agreeable solution. Some mediators begin with a meeting of all parties, but in litigated disputes, most attorney or retired judge mediators dispense with a joint meeting and instead go immediately into private meetings with the parties and their counsel.
Mediation communications are, by statute, confidential in that the parties and the mediator are not allowed to disclose any of them in any legal proceedings. The mediator may not be subpoenaed to testify for either party in any matter related to the mediation. Nor may any documents disclosed at mediation be admitted in any legal proceeding except for a settlement agreement signed by the parties at the mediation or thereafter as part of the mediation process.
When the parties reach a settlement at the mediation, they typically put it in writing which, when signed by all necessary parties, becomes a binding contract. Aside from this final written agreement signed by all parties, no one is bound by anything said or done during mediation. If the parties do not reach an agreement in the mediation, they are free to take any other appropriate measures available to them, including pursuing or completing litigation.