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Arbitration
In arbitration, parties agree to have a neutral third
party, usually an attorney or retired judge who has expertise in the
particular subject matter, hear the case presented and render a decision.
Arbitration is similar to a trial yet less formal, less time-consuming
and less costly. In most cases the parties agree that the decision
will be final and binding. An arbitrator is not bound by the rules
of evidence and has a great deal of leeway in handling evidentiary
issues. Most arbitrators will take rules of evidence into consideration
but are not required to do so.
In arbitration, evidence is
presented and both sides usually make opening and closing statements.
If witnesses are present, there is often direct and cross-examination.
Pre-arbitration motions, hearings, or conference calls are possible
to discuss the ground rules for how the hearing will proceed.
Parties to an arbitration hearing may choose to agree on "high/low
parameters" that will limit the possible range of awards. These parameters
are usually not disclosed to the neutral, but if the parties agree,
may be disclosed.
Since arbitration is a contractual agreement
between the parties, arbitration agreements may involve terms specific
to the case at hand, such as "liability only" decisions or any other
limits as to what the arbitrator is being asked to rule on. Arbitrators
generally issue a written decision within two to four weeks of a hearing.
Arbitration
Panels
In some cases, usually larger or more complicated
ones, the parties may choose to utilize an arbitration panel composed
of two or three arbitrators. In a two-member panel, each party picks
an arbitrator and the two render a mutually agreed upon decision.
Two-member panels are most often used in "damages only" cases where
the sole issue is valuation of an injury. Tribunals, or three member
panels, are usually composed of a neutral picked by each side and
a third arbitrator chosen by the first two neutrals or jointly by
the parties. The three arbitrators hear the case together, mutually
discuss how they will rule, and choose a panelist to write the decision,
which they will sign and render.
Mediation
Mediation is a process in which the parties agree to
have a neutral third party assist them in trying to resolve their
dispute. The mediator has no authority to issue a decision, but rather
helps the parties assess the relative strengths and weaknesses of
their respective positions, with a goal of reaching a mutually agreed
upon settlement. If the parties are able to reach a resolution, they
usually sign a binding settlement agreement. If no settlement is reached
the parties are not bound by what was discussed in the session. Mediation
is an informal process, in a confidential setting, that allows parties
to explore any issues that they may consider relevant to help them
come to terms. Although the mediator is not in a decision-making role,
the parties may request a "case evaluation." A case evaluation may
be oral or written. It is generally non-binding and allows the mediator
to express his or her thoughts as to the relative merits of the case.
A case evaluation can be used as a guide to the parties in their settlement
negotiations.
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