Bud’s company, The Anniston Bait Company, was in trouble. Bud had been sued by a former business partner and it looked like they were headed for a lengthy court case. However, he heard about something called alternative dispute resolution. He learned it is generally an easier way to settle a lawsuit using negotiation, mediation, and arbitration. They had already tried negotiation but were unable to reach a settlement. Bud and his lawyer decided to try another method of alternative dispute resolution. When it came to arbitration vs. mediation, though, Bud was not sure which to choose.

Formal vs. Informal

Arbitration tends to be more formal than mediation. Parties involved in an arbitration present their case in a hearing similar to a trial. At the actual arbitration, the parties may be heard by one arbitrator or a panel. The arbitrator may have formal rules and regulations about how the arbitration will proceed and how the parties are to act.

On the other hand, mediation is more informal. The mediator meets with the parties and their attorneys at an agreed-upon time, date, and location. Typically, everyone consults together, then break out into small groups. The mediator moves between the groups facilitating agreements that lead to settlement. However, the parties are not required to settle at a mediation.

Legally Binding or Not?

After an arbitration hearing, the arbitrator or arbitrators make a decision on the case presented to them. The decision is usually legally binding on all parties. In most cases, the decision is not appealable.

However, the decision reached in a mediation is a mutual agreement between the parties. The mediator does not serve as judge and jury. Instead, he or she facilitates a settlement that typically is not legally binding. However, the disputing parties tend to feel more satisfied because they reached the agreement instead of having a solution forced on them.

Faced with Arbitration vs. Mediation, Which Will Be Right for You?

One day, you or your company may be sued or just find yourself in a serious disagreement that cannot with be resolved. If so, either arbitration or mediation – or both – may be a timely, less expensive solution to a courtroom battle.

When you need an attorney, call Bruce Adams. He has the skills and experience to help with your business and estate planning concerns. Please contact us at 256-237-3339 to set up an appointment. Our office is located in Anniston, Alabama, but we assist clients in surrounding communities like Oxford, Jacksonville, Heflin, Gadsden, and Pell City.