Mediation and arbitration offer significant advantages over traditional litigation. These forms of alternative dispute resolution may help parties avoid the considerable time and expenses associated with going to court to resolve disputes. But unlike traditional litigation, some forms of alternative dispute resolution are non-binding on the participants. Non-binding resolution lacks the advantage of yielding a decisive conclusion on a particular legal matter. However, it offers the parties an opportunity to obtain information, hear each other’s legal positions and determine whether or not they want to accept the outcome or proceed with the dispute in an alternative forum.

Non-binding arbitration. In a non-binding arbitration, the arbitrator issues a non-binding opinion addressing the rights of the parties. The arbitrator is chiefly responsible for providing a determination of liability and an estimate of damages that are recoverable by either or both of the participants. In many cases, the arbitrator’s opinion is used by the parties to further negotiate a settlement. To this extent, each party can evaluate the merits of his position to prepare for the next phase of the dispute without being bound to the resulting ruling. The parties are free to reject the arbitration “award” or determination if they so decide. After the arbitration, the parties may pursue their claims through settlement proceedings, binding arbitration or traditional litigation. More often, binding arbitration is relied upon to resolve disputes, particularly in contracts that provide for dispute resolution in the event of a breach of contract.

Mediation. Mediation is a non-binding process for dispute resolution that relies on a mediator to assist the parties to reach a mutually acceptable decision. Unlike binding or non-binding arbitration, mediation is not designed to determine an “award.” Parties can formulate their own conclusions as they are not bound by the outcome of the proceedings. Since it is a voluntary process and the parties are not compelled to abide by a third-party’s judgment, participants exert significant control over the outcome of their dispute and are generally motivated to amicably settle the issues. Both parties must agree to a settlement in mediation; if they fail to reach a mutually agreed upon solution, then both participants can abandon the proceedings.

Contact Shane Coons at 949-333-0900 or visit his website at www.ShaneCoonsLaw.com to find out more about his practice.