Back to Category » Alternatives to Lawsuits
The second method by which disputing parties arrive at arbitration is through an agreement after a dispute has arisen. For instance, you may believe a former employee has stolen confidential information from your company before his resignation. You may file a lawsuit against the employee who has wronged you. For a variety of reasons, before or after you have filed the lawsuit, you and the other side may agree to take the matter to arbitration rather than to the courts. As mentioned before, the reasons can include the parties’ desire to preserve the confidentiality of the information used in the proceedings, expedite the proceedings which are typically slower through the courts, or save on expenses.
Where then do you find an arbitrator? There are many organizations which provide neutral arbitrators. Some of the organizations are not-for-profit, while others are for profit. The not-for-profit types would include the American Arbitration Association and National Academy of Arbitrators, while the for-profit types would include JAMS, an acronym for Judicial Arbitration and Mediation Service, which employs many retired judges. Typically, arbitrators serve only in their field of expertise, whether real estate law, environmental law, or employment law. On the other hand, active judges in California courts do not have the luxury of taking only those cases they feel comfortable with, but must deal with whatever cases come their way. That has the potential for judges to make decisions that turn out to be less useful because of their lack of knowledge in specific areas of law.
How does an arbitration proceeding actually work? Though usually less formal, an arbitration proceeding is very much like a trial in court, except that there is neither a judge nor a jury. Both sides will present their evidence and arguments to an arbitrator or a panel of arbitrators, and each can call witnesses to support their side of the case and question the witnesses called by the other side. Like in a courtroom, all parties are entitled to be represented by legal counsel. At the end of the hearing, the arbitrator will render a written decision, much like what a judge or jury would normally do. The arbitrator or arbitrators will render a decision on the parties’ disputes and the arbitrators’ decision is legally binding upon the parties, though it may be necessary to go to court to enforce that decision.
A very critical difference between arbitration and a trial in the courts is the lack of a right to appeal. In a case tried in the courts, if you feel that the judge or jury has made a mistake, you can take the matter to a higher level for review. However, in arbitration, there is usually no right to appeal to a higher court for review. The decision of the arbitrator is final. That means, even if you believe the arbitrator has made a mistake, you must live with that decision. Why is there no right to appeal? Part of the reason lies in the fact that this country wants to promote a quick and less expensive ways to resolving conflicts.
- Mediation
While in arbitration the neutral third party will issue a decision which usually binds all parties, in mediation the neutral third person has no such authority. A mediator’s task is to help the parties find alternatives such that the parties may arrive a type of resolution over which they have more control than in the arbitration or court trial contexts. In other words, if the parties cannot come to agreement on terms to resolve their conflict, then the conflict remains unresolved, and the matter must be resolved either through arbitration or litigation. The question then becomes: Why bother with mediation if the matter may ultimately end up in litigation? In many instances, mediation is chosen because the disagreeing parties have long term relationships and they wish to continue doing business with each other on friendly terms. One example would be a franchisor and a franchisee with a relationship that reaches back several years and could reach into the future several more years. In those instances, parties are keen to use mediation in hopes of resolving the legal problems quickly and amiably, so they both may continue to profit from their relationship.