Alternative dispute resolution is a California court process that assists with keeping cases out of the courtroom. While it may not always work, it is one avenue individuals and businesses who disagree may pursue at the onset of a case.
Mediation and arbitration are similar processes the court encourages litigants to take before proceeding forward. Understanding the differences between the two may come in handy should the need for one arise.
What is mediation?
Parties who disagree may sometimes need to maintain some business or personal relationship. Mediation may prove beneficial in reaching a reasonable conclusion for the conflict and smoothing the way for the future. In mediation, a third party assists with getting disagreeing parties on the same page by facilitating positive communication that leads to compromise. The court does not usually order mediation, but it may suggest it. Particularly opposing parties may not benefit from this tactic.
A mediation agreement is not binding, and before the court process concludes, a party may throw out whatever deal came out of it.
What is arbitration?
When two sides do not look like they can agree and a compromise does not appear plausible, the court may order the parties to attend the arbitration. This process involves a third party who acts as a judge and negotiates the terms of a settlement. While similar to mediation in some ways, the outcome is binding. It may also result in a fracture of the relationship between the parties going forward, especially if the outcome is unfavorable.
Both mediation and arbitration serve to reduce the time and money spent to resolve differences. They both also allow the parties to maintain control over the outcome rather than allowing a judge to dictate it.