When you signed that real estate purchase contract last month did you initial the box that will compel you to arbitrate rather than litigate any dispute that may arise in the future about the contract or about the million dollar house you just bought? Did you check the other box agreeing to mediate before initiating any legal action? Did you do the right thing, the smart thing?
What’s the difference between litigation and arbitration? How does arbitration differ from mediation? Litigation, arbitration, mediation – what do these words mean?
Litigation is what happens when a lawsuit is filed in court. The procedures and processes that the lawyers and judges use right through a jury trial, verdict and judgment are all part of the litigation. A claim that is being litigated is a claim that is going through the court system.
Arbitration is very similar to litigation but arbitration is conducted outside of the court system. The disputing parties hire an arbitrator who will be both judge and jury. An arbitration hearing is like a trial and the arbitrator will make a decision called an award, which will have the same effect as a verdict and judgment rendered in court. Arbitrations usually go faster than litigations because the procedures are simplified. The parties pay the arbitrator’s fees in addition to their own attorney’s fees.
While arbitration and litigation are similar in that the arbitrator or the judge and jury make a decision, a mediator makes no decision about the matters in dispute. Mediation does not include a trial of the case. Mediation is a facilitated negotiation and the mediator is the facilitator. In a successful mediation the parties, with the help of the mediator, negotiate and may voluntarily agree to settle their dispute. Mediators, like arbitrators, are hired and paid by the parties. A dispute can be mediated before or during arbitration or litigation.
A decision to initiate litigation is a serious matter. So is the decision to waive your right to litigate in court and to agree to privately arbitrate your case instead. Mediation might result in a resolution of your case, peace and possibly even satisfaction. Make a thoughtful decision about when and whether to mediate a dispute. Unsuccessful mediations, however, can make litigation or arbitration harder and more expensive and can reduce the chances of ultimately settling your dispute on acceptable terms.
I will have a few tips for our readers in Part II of this series on how to decide whether to agree to arbitrate your dispute rather than insisting on your right to litigate in court. Part III will feature the mediation process. Mediation has become so popular and common that it is assumed that disputes will end up before a mediator. Stay tuned.
Content prepared by Edmond McGill. © Edmond McGill, 2016
This message and the information presented here do not create or evidence an attorney-client relationship nor are they intended to convey legal advice or counsel. You should not act upon this information without seeking advice from a qualified lawyer licensed in your own state or country who actually represents you. In this regard, you may contact The McGill Law Office and then representation and advice may be given if, and only if, attorney Edmond McGill agrees to do so in a written contract signed by him.