The Benefits of Arbitration and Mediation

Filing a lawsuit and going to trial sometimes is the best route to ensure you are fairly compensated in a personal injury claim, employment dispute, wrongful death, or another type of civil lawsuit. However, trials can be expensive, take significant time (sometimes years before getting to court), are risky, and are very stressful.

To minimize the risk and costs of going to trial, parties can agree to alternative dispute resolutions. The two most commonly used alternative dispute resolutions are arbitrations and mediations. There are several benefits to both, but like trials, there are also some drawbacks. Understanding the difference between arbitration and mediation can help you decide how best to proceed with your case.

What Is Arbitration?

Arbitration is when a neutral arbitrator hears all the evidence and then makes a determination binding upon all the parties. Similar to a trial, there is typically discovery preceding the arbitration, and both sides usually prepare as if it is a trial. The arbitration is conducted in a more relaxed and informal setting. However, the cases are still presented as a trial would be —including opening statements, the plaintiff presents witnesses and evidence, with cross examination by the defense, the defense then presents witnesses and evidence, with cross examination by the plaintiff, and finally concluding with closing arguments on both sides. 

Sometimes arbitration is mandatory, and a party waives their right to a trial. This is seen when a party signs a mandatory arbitration clause in a contract, and arbitration may be their only option when a dispute arises. In these cases, an attorney can review your agreement and assess the situation to determine its validity. 

Since both sides typically agree to arbitration, they also agree to the terms of what is permissible during the arbitration process. One major benefit of arbitration is that all parties can agree to waive the live testimony of an expert and have expert reports admitted into evidence in lieu of testifying, which is usually not permissible in Virginia Circuit Courts. All sides typically agree to waive certain objections as well, relaxing the rules of evidence.

The arbitrator acts as a judge and jury, ultimately rendering a final decision. A potential drawback is that the arbitrator’s decision is final. In addition, included in almost all arbitration agreements is that the arbitrator’s decision cannot be appealed or disputed. 

Who Can Be an Arbitrator?

Anyone can be an arbitrator. Typically, they are retired judges or experienced attorneys that the parties choose together. Alternatively, an arbiter tribunal consisting of three members may be used. Each side chooses someone to be on the tribunal and together selects the third member. When arbitration is mandatory pursuant to a contract agreement, the terms of the contract may also designate who the arbitrator must be. 

What Is Mediation?

Mediation in Virginia involves using a third-person mediator to act as a liaison between the parties involved in a dispute. Unlike arbitration, the mediator does not issue a binding decision. Instead, they focus on helping the parties understand each other’s positions, with the goal of reaching a resolution that everyone agrees to. Typically, the parties are in different rooms, with a mediator going back and forth between them, highlighting the pros and cons of their case in an attempt to reach an agreeable settlement. 

Mediators help the parties reach a settlement by listening to summaries of the evidence and the arguments from each side and discussing the situation with the parties privately to see what they are ultimately looking to receive. Everything discussed with the mediator in private is generally confidential and will not be shared with the opposing party unless agreed upon. Mediators become a communicator between the parties and help identify what’s most important to each. They determine where the parties are willing to compromise and find common ground. 

Mediators are neutral in these proceedings, which has the added benefit of cooling down tempers if they run high. Meditations allow for the parties to vent their grievances to a mediator without the opposition hearing, preventing further escalation of tension between the parties. In Virginia, mediation is voluntary and can be stopped at any time if one of the parties does not think an agreement can be reached or is not happy with the progress.

One of the main differences between mediation and arbitration is that mediation is not binding. Either party may decide to pursue another avenue to settle the dispute, including filing a lawsuit and going to trial. Additionally, mediation is even less formal than arbitration, with the rules of evidence playing even less of a role.

Benefits of Arbitration & Mediation

One of the benefits of arbitration and mediation is that the chosen neutral third party has a solid foundation and understanding of the intricacies of the case and area of law. In many trials, jurors struggle with understanding the issue and facts presented. This can hinder and directly influence the jury award, creating a verdict that can be shocking to either party.

Additionally, trials are expensive and time-consuming. Both parties can save a lot of money and time by settling a case in mediation or going the arbitration route. This also creates an incentive for everyone involved to attempt to resolve the matter without going to trial.

Another benefit of mediation and arbitration is that both parties can minimize the risk of a potentially devastating result. Juries are unpredictable and can award an injured plaintiff very little or an exorbitant amount. Mediation prevents this because all parties agree on the final amount. Parties going to arbitration can also agree to a high-low agreement for the arbitration. A high-low agreement is when a plaintiff agrees that no matter what, the most they can recover will be capped at a specific amount, and in return, the defendant agrees that no matter what, they will pay a minimal amount. Agreeing to a high-low agreement for arbitrations is another benefit to the parties, as they can further minimize their risk.

How to Decide Between a Trial, Arbitration, or Mediation

Arbitration, mediation, and trials have benefits and disadvantages. The avenue to pursue when a dispute or claim arises highly depends on the facts and parties in a case. Trials provide the parties the opportunity to have their day in court and the potential for big wins or significant losses. Conversely, arbitration and mediation reduce the risks and costs of trial for the parties and resolve the dispute sooner than a trial would.

Whether you’re considering mediation, arbitration, or going to trial, seek the advice of an attorney. The team at Curcio Law has extensive experience providing counsel in alternative dispute resolutions for personal injury cases. We can review your case, discuss your options, and give feedback on personal injury cases.

Contact Curcio Law online or text or call 703-836-3366 for a free consultation today.