Sometimes, avoiding litigation in a legal dispute is the best way to achieve a resolution. Mediation and arbitration may be viable alternatives to reduce the time and money spent litigating. Here are some pros and cons to choosing mediation vs. arbitration when deciding whether or not to opt for avoiding litigation.
The Pros & Cons of Mediation
Pros:
1. Control
In mediation, you must sign in agreement of the final decision. This gives you control over your approval of the ruling. You also reserve the right to litigate if the mediation fails, making this a less costly alternative to heading straight to court.
2. Impact on Future Relationship
The likelihood of a future relationship with your opposing party can impact your decision of mediation vs. arbitration. When a mediation occurs, both parties are given time to present their cases, discuss the dispute and attempt to come to a resolution. Since this is facilitated by an unbiased third party, potential damage to the relationship of both parties in the future is less likely to occur.
Cons:
1. Flexibility
Though it is also a positive, flexibility in the terms of an agreement reached by mediation can be bad for one or more party. Terms of the mediation can be amended at any time. For those that want more finality in the resolution, mediation may not be a good option for you and avoiding litigation may not be possible.
2. Time
Mediations tend to be quicker than litigation, but if an agreement is not made then both parties may have wasted their time. Having an unskilled mediator may also contribute to an unproductive resolution and the dispute may continue on into court.
The Pros and Cons of Arbitration
Pros:
1. Speed
Arbitration can be quicker than litigation because the allotted time periods for resolution may be shorter. However, cases with multiple arbitrators or more complicated disputes may occasionally take longer than litigation.
2. Confidentiality
Since the conflict is resolved outside of court, the records are sealed protecting the identities and conversations of all parties. This can be a good option when trying to mitigate public damage from a legal dispute. When you want confidentiality, the options of mediation vs. arbitration are always more favorable than litigation.
Cons:
1. Fairness
In some disputes, such as those with large corporations or multiple arbitrators, you may be at a disadvantage when pushed into the arbitration process. Some arbitrators frequently work together and you may be discriminated against.
2. Finality
Arbitration rulings can be tough to appeal which makes it difficult to resolve issues even if a mistake has been made in the process. There is no jury in arbitration, which can be a hard right to give up. The arbitrator acts as judge and jury, so you are leaving your fate in their hands.
When faced with a lawsuit, it is always best to consider your options. When avoiding litigation, consider the pros and cons to mediation vs. arbitration. Contact your team at Structure Law Group today to get help in making the right decision for you.
About Structure Law Group
Structure Law Group is a San Jose based firm that specializes in business issues including business formations, commercial contracts and litigation.