Arbitration v. Mediation

Last Updated on Tuesday, 5 February 2013 03:12 Written by Chris Griswold Tuesday, 5 February 2013 03:11

It’s hard to believe it’s already 2013!  Looking at my family over the holidays, I could see all the things I’m thankful for….  It’s my hope that everyone reading this was also that lucky.  This month, I want to discuss the differences between arbitration and mediation, what each accomplishes, and why each is important, among other things.  See more below (and don’t forget to click on my Facebook or YouTube links below to also see my short video on this material).

Arbitration v. Mediation  

Everyone has heard of arbitration and mediation, but what are they?  Well, they’re both ways of resolving conflict outside of the courts.  States such as Texas (and others) have already mandated that parties attempt to settle their differences during a mediation session – all after the petition is filed; but prior to their case coming on for trial.  Oklahoma does not yet require mediation at any point in the life-cycle of a dispute; however, it may at some point.  For now, just know that parties in Oklahoma can still voluntarily elect to go through mediation at any time after a dispute arises, whether before the filing of a lawsuit or prior to trial (read more below).

What reasons justify parties going through mediation or arbitration?  First, it reduces/eases the dockets the courts must carry and, in so doing, cuts down on the taxpayers’ burden of funding the court system.  Secondly, given that so many cases seem to historically settle prior to trial, arbitration and mediation give parties more of a realistic, meaningful chance to resolve their differences prior to going to trial (i.e., arbitration and mediation reinforce what seems to normally happen otherwise).  Put another way, during mediation and arbitration sessions, the parties can more easily see (and appropriately respond to) the corresponding strengths and weaknesses in their respective positions – all prior to darkening a court house.

What’s the difference between mediation and arbitrationGenerally speaking, an agreement produced in mediation is not binding upon the parties after the mediation session.  In contrast, an arbitration award/agreement is binding upon the parties (just like a court order).  Accordingly, arbitration can be viewed as a substitute for going to court.

Can arbitration or mediation be required prior to trial or filing suit – even in Oklahoma?  Yes, if the parties write such a requirement into their contract ahead of time (i.e., at the beginning of their relationship).  If no such requirement is written into the contract, then it’s not required.

Half-Day v. Full-Day Mediation Sessions.  Generally speaking, the parties can mutually agree to do either a half or full-day mediation session.  Half-day rates cost roughly half of the full-day rates (not surprising).  Half-days usually last for four (4) hours and full-days usually last eight (8) hours.  The parties have to each pay their own respective half of the mediation fee to the mediator.  Full-day sessions, for whatever reason, seem to produce the most resolution.  Why?  After a full-day of negotiating together and paying the mediation fee (usually in excess of $1,000 per party for a full-day rate), the parties are pretty vested in the process.  It’s kind of like “The Breakfast Club” where they’ll try to get it right by the end of the day….

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