What is the difference between business mediation and arbitration and what do you need to know if you are in a business-related dispute? Mediation and arbitration are separate legal venues designed to help parties in a dispute to find resolution to business disputes without going to a full trial before a California Court. Most disputes that reach mediation or arbitration involve an underlying lawsuit (or the significant threat of one), and California’s Trial Courts require that the parties undergo a settlement conference and prefer the completion of mediation prior to hearing the case in open Court.
Business Mediation
It is important to understand the difference between business mediation and arbitration as they are two completely different legal vehicles. Business mediation is a private and confidential venue which keeps all of your business and financial information out of the public record. “What happens in mediation, stays in mediation.”
In business mediation, the parties agree upon an experienced mediator who focuses on issues such as the dispute at hand and has the awareness, if not experience as a lawyer or judge, to provide insight into the law and how things are likely to play out. The mediator works with the parties to help them to clearly understand the genuine issues of the dispute, the position of each side and options for resolving the dispute at hand. An effective mediator will help each side to understand the strengths and weaknesses of their position as well as the manner in which similar disputes are usually resolved.
The parties are not obligated to agree to all or part of the mediator’s recommendations. If agreement is reached it is memorialized in a settlement agreement. This is often the end of the dispute. However, it is not an “all or nothing” game. Mediation is often able to resolve a part or a significant portion of a business dispute, leaving only a portion of the original litigation to be resolved. In many cases remaining disagreement is resolved after mediation and prior to arbitration and/or trial. An effective mediator will usually stay in touch with the parties to help them reach a successful resolution.
Business Arbitration
In business arbitration, each of the parties will put forward a few suggested arbitrators and then work to reach agreement on selecting the arbitrator for their case. Unlike mediation, where the mediator is working in a more collaborative way, arbitration is a much more structured process designed to give a swift, final decision. The agreed upon “neutral” or arbitrator is more like a judge. The arbitrator establishes the process the parties will follow and the timeframes to be observed.
The arbitrator may begin with briefs from the attorney of each party, then collect evidence and witness testimony before ultimately rendering an “award” or “finding.” Arbitration is not bound by the constraints of trial law, and while the arbitrator may incorporate part of the normal trial process, most superfluous things (i.e. a lot of motions and other legal posturing) are eliminated. The decision of the arbitrator is final in a binding arbitration. The parties are required to abide by the ruling of the arbitrator unless there is (an exceptionally rare) fraud or corruption associated with the process. This is why it is so important to be represented in arbitration by highly experienced, proven and successful business arbitration attorneys like the Watkins Firm.
Arbitration can be non-binding if the parties wish. Non-binding arbitration may simply provide external input on the strengths and weaknesses of your position prior to an actual trial. This is becoming much rarer as the whole point of arbitration is usually to get a decision and bring the dispute to an end.
The Difference Between Business Mediation and Arbitration
The difference between business mediation and arbitration is the difference between flexibility and structure, the collaborative and the adversarial, the flexibility to pick and choose your outcome versus having an outcome determined for you.
The legal options of mediation and arbitration can prove to be effective tools, however there are advantages and challenges associated with each. Why is it important to work with the attorneys at the Watkins Firm for your business dispute, mediation or arbitration?
The Watkins Firm brings more than 40 years of service, experience and proven success to your side of the equation. We approach each client’s unique situation with the client’s best interests at heart, searching for the best possible resolution, often in the shortest period of time and at the least expense. If you want your business dispute resolved we will work to efficiently to reach a settlement which reflects your goals and objectives in a timely, cost-effective manner. If there are substantial interests or matters of principle we are prepared to take any case through negotiation, mediation, arbitration and/or trial if necessary in order to accomplish our client’s objectives. If you are involved in a business dispute we invite you to review the strong recommendations of our clients and contact the Watkins Firm or call 858-535-1511 for a complimentary consultation today.
