Alternative Dispute Resolution or “ADR” is a process nearly every litigant will encounter in today’s judicial system. ADR was conceived, and has been widely adopted, to relieve court congestion, to defray litigation costs and provide effective alternatives to court trials. As the form of ADR most frequently ordered by the courts, mediation is a “win-win” process because the parties, with the guidance of their counsel and a mediator, can craft their own terms for dispute resolution rather than leaving the final outcome to a judge.

Mediation is facilitated by trained, certified mediators, usually former judges or experienced litigation attorneys, who act as facilitators, – and not as deciders – to usher the parties to a negotiated settlement. Mediation generally occurs before trial but after the investigative or discovery phase of litigation when counsel and the parties have evaluated the merits of the case.

At the mediation conference, the mediator, the parties and their counsel, meet together in a setting of confidentiality, and listen to each attorney’s presentation of their client’s case. The two sides and their attorneys then retire to two separate conference rooms to privately discuss their positions with the mediator. The mediator engages in shuttle negotiations encouraging the parties to settle, while reminding them of the alternative: the ‘win or lose’ risks of a court trial.

Arbitration is an entirely different form of ADR. It is similar to an informal court trial where witnesses and evidence are presented to an arbitrator by counsel for the parties. The arbitrator is selected jointly by the parties or may consist of a panel of three arbitrators. The arbitrator is empowered to make findings of fact and law, and to render a final decision which may include the award of damages and attorneys fees. While mediation is generally court ordered, arbitration is usually selected as a result of an arbitration clause in a contract in dispute between the parties.

The contract clauses will specify if the arbitration is binding or non-binding. ‘Binding arbitration’ means the parties contractually agree to forgo judicial dispute resolution for final and complete resolution by the arbitrator, with limited rights of judicial appeal. In non-binding arbitration, the parties can go through the arbitration process, and if they are unhappy with the result, they can then proceed to court for a judicial determination of the same facts and legal issues.

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