Mediation and arbitration

Mediation

This is a process in which the parties to a dispute, with the assistance of an impartial third party, the mediator, identify the issues in disputes, develop and consider some alternatives and strive to reach agreement. For a mediation to be successful, the parties to it must genuinely wish to resolve the dispute as the mediator has no advisory or determinative role but will facilitate the mediation process. If there is this genuine intent from both parties a settlement will usually emerge. The outcome of this settlement is usually documented and an agreement signed. If the parties are unable to reach agreement they may look at other forms of resolution, but these will often have a binding outcome like an arbitration or a court determination.

Arbitration

In an arbitration, the parties to the dispute present arguments and evidence to the arbitrator. This is a more formal process than a mediation. At its core is the confidential, private judicial determination of a dispute by an independent third party. The arbitrator’s decision is final.

Litigation

Litigation is often seen as a last resort when there is a dispute and as the more adversarial option. Depending on the extent and amount being claimed, it can be a relatively slow and expensive alternative to dispute resolution. The litigants are subject to the formal court procedures and rules of evidence and the proceedings take place in public.

Why choose Arbitration over litigation?

One of the greatest benefits of arbitration over litigation is speed. It may take a significant period for the dispute to get into court, but the process may be fast -tracked when the parties decide to go to arbitration. Other benefits may include the following:

• • parties can choose the arbitrator or agree who can choose the arbitrator if they are cannot agree;
• • the process is not bound by formal court procedures and parties can agree on the procedures to be adopted;
• • the process is confidential and private; and
• • arbitrators are not bound by the rules of evidence but the rules of natural justice.

However, it should be noted that in an arbitration the decision is final and rarely can there be an appeal from an arbitrator’s decision.

See Avoiding and resolving disputes.

Choosing the mediator or arbitrator

If the parties cannot agree as to who should act as mediator or arbitrator, there are several organizations which provide this service including:

• • Australian Commercial Dispute Centre;
• • Resolution Institute (merger between IAMA and LEADR); and
• • Law Societies of a state.

See Mediation and arbitration.