Alternative dispute resolution is popular in the US today as it offers parties engaged in legal issues a way to avoid the courtroom, and all the hassles that accompany it. Those involved can avoid backed up court calendars, along with finding greater flexibility if dates need to be changed. This means that a resolution can usually be reached much more expediently, with less stress, and significantly less expense.

In California, arbitration, mediation, and judicial reference are the methods of ADR employed outside of the courtroom. Arbitration and mediation are more commonly used, but judicial reference is also effective, with the parties having their case (or perhaps just one part of the case) heard before a referee who will then file the outcome with the court. And while arbitration and mediation may be more well-known, they are also often confused despite some clear-cut differences in the process.

Mediation occurs in a much more casual setting, with a neutral party who assists those involved in a dispute reach a resolution. While the mediator does not require a license or law degree in California, they should possess the experience to help those in dispute come to an agreement. Sometimes this requires creative thinking when the going gets rough, with the mediator facilitating but not deciding. Mediation may be required by the court but is also often a voluntary process entered by two parties who may have a long-standing relationship they do not want to see destroyed due to a legal issue. If an agreement is reached, the mediator draws up a contract which must be signed by the parties involved; however, this document may not prove to be as binding as an arbitration award.

In arbitration, an unbiased third party is usually chosen by the parties involved to oversee and hear the case. More than one arbitrator may be chosen, and in fact, there may be the need for a panel of several different individuals to arbitrate. If the disputing parties cannot or do not choose an arbitrator, this decision is left to the court. Once selected, the arbitrator not only acts as a referee between the parties, but also makes the final decision. This is in stark contrast to mediation, where those involved are being encouraged to come to a resolution together—and if they cannot, then the case may indeed move forward to the courtroom.

Testimony and evidence are presented in arbitration, but here the arbitrator has more latitude than a judge would in deciding how important these features are as they come to a decision. If the parties both entered the process agreeing that they would accept binding arbitration, then the outcome as a rule is much more final than in mediation.

And while arbitration may be of great benefit for two businesses that are on equal footing and having a dispute, it can be challenging for consumers who are forced to rely on this process for settling a legal issue with a larger corporation that routinely requires initial contracts to be signed with arbitration clauses. For the company with infinite resources, arbitration is much more convenient, but could become difficult and costly for the average consumer who is forced to travel to the appointed location, as well as dealing with arbitrators who may be biased toward the corporation.

Attorney Shane Coons is highly skilled in all methods of ADR, to include mediation, arbitration, and California’s judicial reference system. If you have a legal issue and want to learn more about the best alternative dispute resolution process for your case, please call Shane Coons now at 949-333-0900 or email us at Shane.Coons@seclawoffices.com.