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Law Offices of JAMES GLASSFORD
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What is Mediation and Arbitration of Contract Disputes?
Mediation and arbitration are the new wave in resolution of contract disputes. Both take place in a non-courtroom location. Mediation is a process for settling a contract dispute without a trial. In mediation, the parties must reach an agreement for the settlement of the case. If no agreement is reached, then the mediation is over and the dispute returns to its pre-mediation status.
Arbitration, on the other hand, is an informal method for reaching a final resolution of a contract dispute out of court. An arbitrator hears the case in an office. Evidence is presented much like in a courtroom. The rules of evidence are usually relaxed. At the conclusion of the hearing, the arbitrator makes an award. In most cases, the award is binding on the parties.
In mediation and arbitration, the parties must agree in contract to the process. Usually, the contract will include a mediation or arbitration term. If not, the parties can agree to the process after the making of the contract.
I offer my services as a mediator in disputes involving contract issues, because I have a plan for success in mediation. I do not believe in lecturing parties and their attorneys on the law. By the time they come to the mediation, they will have a much better understanding of the issues and law than I. Mediation can be successful only if the parties have confidence in the neutrality of the mediator and the mediator takes a position on each of the issues in the case.
Confidence in the neutrality of the mediator is essential to the success of mediation. Not only must a mediator be neutral, but he must maintain the appearance of neutrality at all times. I have arrived for mediation only to find the mediator in the conference room with the other party and his attorney. I have wondered about the coziness of the relationship between the mediator and the other side. Parties cannot help but question whether the mediator is truly neutral. Confidence in the mediation can be lost by the smallest crack in the wall of neutrality.
On the other hand, a mediator should take a position on each material issue in the case, not that the position should be made known to the parties. The purpose of taking a position is to determine who is being realistic in their demands or offers of settlement. Many times, parties will fail to see the importance of a fact or circumstance. This might happen due to an emotional attachment to a belief that does not jibe with the facts. When a party has an unrealistic view on an important issue for recovery on or defense of a claim, that view is a major road block to resolution of the claim. The mediator should make every effort to break through that road block. This must be done with care and reason and with a general understanding of the law.
The mediator should first ask the parties to list the issues. Issues come in two flavors: legal and factual.
The parties may be in disagreement about the applicable law. This could happen for two reasons: a party is wrong about the law; or, there is no law that applies to the circumstances of the matter. With knowledge of the law as far as it goes, the mediator should be able to help the parties reach agreement on the particular legal issue. Either the point can be looked up quickly or the parties can fall back on general principles. Otherwise, if agreement cannot be reached, then the parties might seek court resolution of the legal issue. Perhaps, this could be done by motion for summary judgment on a stipulation of facts. The mediation may work to the parties benefit in drafting a stipulation of facts. Chances are good that neither party wants to take the risk of a court decision. That's why they agreed to mediation in the first place. Settling for half the pie is often thought better than risking the loss of the entire pie. Falling back on general principles of law often works where the parties are willing to resolve their differences through mediation. Fortunately, in most cases, the law is not in dispute. Just the facts.
Next, the mediator should solicit the candid views of the parties on the fact issues. This should be done with each of the parties separately, with an eye toward getting the parties to understand the strengths and weaknesses of their cases. At this point the mediator should avoid the appearance that he is blessed with flawless wisdom, but he should seek to have the parties explain their positions. If a party's position is unreasonable, the mediator should tactfully discuss this. If that can be done convincingly, the mediation should turn out to be a success.
In short, success in mediation depends on knowing the issues and resolving them realistically. Otherwise, many a case will be resolved by a jury. Juries can be swayed by reason or emotion. Therein lies the risk the parties seek to avoid through mediation.
Arbitration Is an Efficient Way to Dispute Resolution.
Besides being faster than court proceedings, arbitration has two major differences from court trials. First, the rules of evidence, in most cases, do not bar parties from getting a fair hearing of their case without spending exorbitant sums of money marshaling witnesses and documents for the hearing. Second, the arbitrator has greater latitude than a judge in fashioning remedies.
Knowledge of the law of evidence is essential in arbitration. Although the rules of evidence are not applied strictly in most arbitrations, they are still good guides to the reliability of evidence. The parties should have wide latitude in presenting their evidence, leaving it to the arbitrator to weigh the evidence for materiality and credibility.
The California Supreme Court in AMD v. Intel Corp., 9 Cal. 4th 362 broadened the scope of remedies available in arbitration. Legal remedies applied in court may be too restrictive in some cases. In arbitration, special remedies shaped by the arbitrator may work to the benefit of the parties under the facts and circumstances of the case.
Mediation and arbitration are the new wave in resolution of contract disputes. Both take place in a non-courtroom location. Mediation is a process for settling a contract dispute without a trial. In mediation, the parties must reach an agreement for the settlement of the case. If no agreement is reached, then the mediation is over and the dispute returns to its pre-mediation status.
Arbitration, on the other hand, is an informal method for reaching a final resolution of a contract dispute out of court. An arbitrator hears the case in an office. Evidence is presented much like in a courtroom. The rules of evidence are usually relaxed. At the conclusion of the hearing, the arbitrator makes an award. In most cases, the award is binding on the parties.
In mediation and arbitration, the parties must agree in contract to the process. Usually, the contract will include a mediation or arbitration term. If not, the parties can agree to the process after the making of the contract.
I offer my services as a mediator in disputes involving contract issues, because I have a plan for success in mediation. I do not believe in lecturing parties and their attorneys on the law. By the time they come to the mediation, they will have a much better understanding of the issues and law than I. Mediation can be successful only if the parties have confidence in the neutrality of the mediator and the mediator takes a position on each of the issues in the case.
Confidence in the neutrality of the mediator is essential to the success of mediation. Not only must a mediator be neutral, but he must maintain the appearance of neutrality at all times. I have arrived for mediation only to find the mediator in the conference room with the other party and his attorney. I have wondered about the coziness of the relationship between the mediator and the other side. Parties cannot help but question whether the mediator is truly neutral. Confidence in the mediation can be lost by the smallest crack in the wall of neutrality.
On the other hand, a mediator should take a position on each material issue in the case, not that the position should be made known to the parties. The purpose of taking a position is to determine who is being realistic in their demands or offers of settlement. Many times, parties will fail to see the importance of a fact or circumstance. This might happen due to an emotional attachment to a belief that does not jibe with the facts. When a party has an unrealistic view on an important issue for recovery on or defense of a claim, that view is a major road block to resolution of the claim. The mediator should make every effort to break through that road block. This must be done with care and reason and with a general understanding of the law.
The mediator should first ask the parties to list the issues. Issues come in two flavors: legal and factual.
The parties may be in disagreement about the applicable law. This could happen for two reasons: a party is wrong about the law; or, there is no law that applies to the circumstances of the matter. With knowledge of the law as far as it goes, the mediator should be able to help the parties reach agreement on the particular legal issue. Either the point can be looked up quickly or the parties can fall back on general principles. Otherwise, if agreement cannot be reached, then the parties might seek court resolution of the legal issue. Perhaps, this could be done by motion for summary judgment on a stipulation of facts. The mediation may work to the parties benefit in drafting a stipulation of facts. Chances are good that neither party wants to take the risk of a court decision. That's why they agreed to mediation in the first place. Settling for half the pie is often thought better than risking the loss of the entire pie. Falling back on general principles of law often works where the parties are willing to resolve their differences through mediation. Fortunately, in most cases, the law is not in dispute. Just the facts.
Next, the mediator should solicit the candid views of the parties on the fact issues. This should be done with each of the parties separately, with an eye toward getting the parties to understand the strengths and weaknesses of their cases. At this point the mediator should avoid the appearance that he is blessed with flawless wisdom, but he should seek to have the parties explain their positions. If a party's position is unreasonable, the mediator should tactfully discuss this. If that can be done convincingly, the mediation should turn out to be a success.
In short, success in mediation depends on knowing the issues and resolving them realistically. Otherwise, many a case will be resolved by a jury. Juries can be swayed by reason or emotion. Therein lies the risk the parties seek to avoid through mediation.
Arbitration Is an Efficient Way to Dispute Resolution.
Besides being faster than court proceedings, arbitration has two major differences from court trials. First, the rules of evidence, in most cases, do not bar parties from getting a fair hearing of their case without spending exorbitant sums of money marshaling witnesses and documents for the hearing. Second, the arbitrator has greater latitude than a judge in fashioning remedies.
Knowledge of the law of evidence is essential in arbitration. Although the rules of evidence are not applied strictly in most arbitrations, they are still good guides to the reliability of evidence. The parties should have wide latitude in presenting their evidence, leaving it to the arbitrator to weigh the evidence for materiality and credibility.
The California Supreme Court in AMD v. Intel Corp., 9 Cal. 4th 362 broadened the scope of remedies available in arbitration. Legal remedies applied in court may be too restrictive in some cases. In arbitration, special remedies shaped by the arbitrator may work to the benefit of the parties under the facts and circumstances of the case.
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