Monday, March 12, 2007

Mediation & Arbitration: Keeping Businesses Out of Court

I recently came across an article in the San Francisco Chronicle which discusses basic concepts of mediation and arbitration in the context of helping businesses consider ways of minimizing the costs associated with court litigation.

I have pasted the full article below and also provide a link to the electronic article at The February 14, 2007 article by is titled: "How arbitration and mediation can keep businesses out of court."

Litigation is an expensive, frustrating and generally inefficient way to resolve disputes. That's why alternative dispute resolution (ADR) is becoming an increasingly popular means of resolving lawsuits before trial and of avoiding litigation altogether.

ADR includes both arbitration and mediation. Although they are different procedures, their goal is the same: to minimize the expense and delay associated with litigation. Numerous public and private organizations provide both mediation and arbitration services.

Arbitration is an adversary proceeding in which parties present evidence and arguments before a third party (or panel), who then decides the dispute much like a judge would in a trial.

An arbitrator can be a judge but is more often an attorney or expert, depending on the subject matter. Usually, the parties agree on the arbitrator beforehand.

Arbitration can be voluntary, judicially mandated or contractual; and the outcome of an arbitration can be either binding or nonbinding (advisory).

In binding arbitration, the parties agree in advance that the arbitrator's decision or monetary award will be final. It's a substitute for a court proceeding and cannot be reviewed or overturned, except under very limited circumstances.

In nonbinding (advisory) arbitration, the decision is not final, but rather intended to help guide the parties toward settlement.

Many contracts today, including collective bargaining agreements and health care benefit packages, contain provisions that compel binding arbitration of disputes. In negotiating any contract, parties may agree in advance to arbitrate almost any dispute.

In mediation, a third party attempts to facilitate communication and compromise between parties in conflict. Mediation is not a legal proceeding, although it can occur during the course of a lawsuit.

Unlike arbitration, the neutral party's role is not to decide who wins but to bring the parties closer together and help overcome obstacles to settlement. The actual structure and conduct of a mediation is usually much less formal than an arbitration.

While an arbitrator's role is generally passive, a mediator may become aggressively involved in trying to settle a dispute.

Many mediators will meet privately with each side and point out the strengths and weaknesses of their respective positions. The mediator also will typically communicate settlement proposals back and forth and help the parties react to those proposals.

Mediation is almost always voluntary and cannot be imposed on the parties, although some courts may require the parties in a lawsuit to attempt to mediate their dispute before the case goes to trial.

Using ADR
Cases suitable for arbitration include:

Construction contracts

Commercial contracts

Banking disputes

Intellectual property

Medical malpractice

Employment discrimination

Multiparty disputes

International disputes

Cases involving critical public employees, such as police officers, teachers and firefighters

Cases suitable for mediation include:

Business disputes

Partnership disagreements

Contract issues


Will contests

Employment issues


Nonviolent crime

Negotiating arbitration

If an agreement includes an arbitration clause, negotiate the terms. For example, you might want to provide for three arbitrators instead of one or require that certain rules be followed. You can find details about arbitration and mediation rules and find professionals at the American Arbitration Association ( provides information about products and services for entrepreneurs, small businesses and professionals to start, manage, finance and build a business. Visit

This article appeared on page C - 4 of the San Francisco Chronicle

Sunday, March 04, 2007

Mediation Styles for Participants to Consider

Mediators acquire many useful tools in learning to put their natural peacemaking and collaboration skills to good use in the field of mediation. One of the tools is the choice of style.

Although there are numerous mediation styles, there are three main ones which most mediators employ, and which many attorneys familiar with mediation are aware of. The three main styles are: Evaluative, Facilitative and Transformative. Each style is employed in different types of disputes and with different types of disputants and most mediators take skills from each of these main styles in each mediation to accomplish various goals in each individual mediation.

Many authors of mediation technique discuss these styles in depth and I will not do that here. I will just provide a brief, broad sketch of each style so that mediation participants, who are unfamiliar with particular mediation styles, can take this basic information and think about what might make the most sense for their own disputes or relationships and to discuss in more detail with their potential mediators.

In "Evaluative Mediation," the mediator hears the cases presented by each side and, without actually making decisions as to who is right or wrong, evaluates the merits of the case, evaluates the likelihood of success for all parties to the dispute if the case has to go to trial, and helps all sides get a better reality test of what the alternative to settlement will be. Evaluative mediators often have backgrounds as trial attorneys or judges and use the skills developed in those arenas to give very useful information to parties who are mediating a case that might otherwise go to trial.

In "Facilitative Mediation," the mediator hears the cases presented by each side and asks questions to get to underlying interests which may not be apparent from the surface disputes. The mediator elicits information as well as creative ideas for resolution from the parties themselves, but focuses on resolving just the dispute at hand. The focus here is on meeting the needs and interests of all parties in a way that results in a win-win for everyone instead of a winning side and a losing side.

In "Transformative Mediation," the focus is on transforming the relationship of the parties or their ability to communicate in a productive manner instead of just solving the immediate dispute. This mediation style is extremely useful in disputes in which there is a continuing relationship between the parties and mediation is being used to solve not just the current dispute but to help prevent future disputes since the parties either have a continuing business relationship or they have children together and must find a way to cooperate in a meaningful way.

This is a broad overview of these three main mediation styles. As a participant to mediation, you may wish to think about how each of these styles may benefit you. You may also see how a little of each of these styles might be even more beneficial. You can discuss these styles and what you wish to accomplish in mediation with your own prospective mediators or in pre-mediation conferences with a chosen mediator. Best of luck to you!