It depends on the industry. For most professionals, you enter into an agreement. If a person fails to uphold their end of the agreement, don't screw around. It is often your money we are talking about. Be sure to always have a good lawyer. This goes for clients and employees alike.
I read your query and the response posted by Melanie Nathan. She is absolutely correct. Mediation is a non-binding forum where parties meet with an independent mediator who hears both sides and tries to help the parties to resolve their differences. Mediation is so successful that in the 20th Judicial Circuit of Florida, all lawsuits must go to mediation before they can be scheduled for trial.
There are different types of arbitration: binding and non-binding and depending on the arbitration clause itself, how many arbitrators are used and how and where the arbitration is conducted. Costs for arbitration can be staggering. In an arbitration (with just one arbitrator), the arbitrator hears both sides of a particular dispute and then makes a decision (much like a Judge) on how the matter should be resolved. Other mediation provisions require that one party picks one arbitrator and the other party picks one arbitrator and then the two arbitrators select a third arbitrator to complete the panel (Think of how expensive that can be if you have to pay each of the arbitrators). If the arbitration is binding, the finding by the Arbitrator(s) can be reduced to a binding legal judgment. If the arbitration is non-binding, the Arbitrator's finding is more like an opinion of how the matter should be resolved. Arbitration provisions can work to your advantage or disadvantage depending upon its terms and the other terms of the agreement or contract. Negatives: Arbitration can be very expensive: take a peek at the filing fees if you are required to utilize the American Arbitration Association; an arbitration provision could require you to arbitrate in a different state under different laws (look at some of your credit card agreements); arbitration could take away certain rights such as having your dispute determined by a jury at a trial. There are also ways that even if you "win" at non-binding arbitration, if you are in a lawsuit, you could be obligated to pay attorney's fees and court costs under the Florida Arbitration Code (Chapter 682, Florida Statutes), if you proceed forward with your lawsuit after non-binding arbitration and do not beat the arbitration award.
I highly recommend that one present this question to a qualified attorney based upon the specific facts and circumstances where arbitration is at issue or being contemplated for inclusion in an agreement (for sure before one signs any agreement with an arbitration provision in it).
Where appropriate and permitted by the governing legislation, I think mediation, med-arb, and arbitration clauses (not necessarily all) can be very helpful. I think we as lawyers need to help our clients find creative solutions to their problems, outside of court wherever possible. However you and your client choose to approach a particular situation, it's your job to communicate with your client and set appropriate expectations.
I don't care for AAA arbitration and try to eliminate such clauses because in my experience AAA arbitration is very expensive and not necessarily time efficient.
Good point, Dr. Wood. I have found that there is little appetite for using open court as the first option. Mediation and arbitration can be those first steps that help mitigate run-away court time and expense.
They should be a requirement, not "nice to have". While no one ever wishes to try to solve issues to that point, I can't imagine that a solid, best-practice contract that doesn't include this - unless the right to bring forward a suit for breach is preferred.
The answer honestly depends upon the relationship between the parties and what you hope to achieve through using an ADR (alternative dispute resolution) provision in your contract. As has been noted, mediation and arbitration are different things. But including one or both in a contract offer several benefits including confidentiality and the chance to mold the means by which your disputes are resolved. Consider consulting a seasoned attorney who is well versed in these ADR mechanisms who can guide you on how best to tailor your ADR provision to achieve maximum efficiency and optimal results best suited to fit the needs of your business.
It's always cheaper to mediate and you are not stuck with the result if you don't like it. The Court mediators take special training and they are pretty good. I would assume that their collegues in other businesses are likely well trained and honest.
Answers (41-50)
It depends on the industry. For most professionals, you enter into an agreement. If a person fails to uphold their end of the agreement, don't screw around. It is often your money we are talking about. Be sure to always have a good lawyer. This goes for clients and employees alike.
I read your query and the response posted by Melanie Nathan. She is absolutely correct. Mediation is a non-binding forum where parties meet with an independent mediator who hears both sides and tries to help the parties to resolve their differences. Mediation is so successful that in the 20th Judicial Circuit of Florida, all lawsuits must go to mediation before they can be scheduled for trial.
There are different types of arbitration: binding and non-binding and depending on the arbitration clause itself, how many arbitrators are used and how and where the arbitration is conducted. Costs for arbitration can be staggering. In an arbitration (with just one arbitrator), the arbitrator hears both sides of a particular dispute and then makes a decision (much like a Judge) on how the matter should be resolved. Other mediation provisions require that one party picks one arbitrator and the other party picks one arbitrator and then the two arbitrators select a third arbitrator to complete the panel (Think of how expensive that can be if you have to pay each of the arbitrators). If the arbitration is binding, the finding by the Arbitrator(s) can be reduced to a binding legal judgment. If the arbitration is non-binding, the Arbitrator's finding is more like an opinion of how the matter should be resolved. Arbitration provisions can work to your advantage or disadvantage depending upon its terms and the other terms of the agreement or contract. Negatives: Arbitration can be very expensive: take a peek at the filing fees if you are required to utilize the American Arbitration Association; an arbitration provision could require you to arbitrate in a different state under different laws (look at some of your credit card agreements); arbitration could take away certain rights such as having your dispute determined by a jury at a trial. There are also ways that even if you "win" at non-binding arbitration, if you are in a lawsuit, you could be obligated to pay attorney's fees and court costs under the Florida Arbitration Code (Chapter 682, Florida Statutes), if you proceed forward with your lawsuit after non-binding arbitration and do not beat the arbitration award.
I highly recommend that one present this question to a qualified attorney based upon the specific facts and circumstances where arbitration is at issue or being contemplated for inclusion in an agreement (for sure before one signs any agreement with an arbitration provision in it).
Where appropriate and permitted by the governing legislation, I think mediation, med-arb, and arbitration clauses (not necessarily all) can be very helpful. I think we as lawyers need to help our clients find creative solutions to their problems, outside of court wherever possible. However you and your client choose to approach a particular situation, it's your job to communicate with your client and set appropriate expectations.
I don't care for AAA arbitration and try to eliminate such clauses because in my experience AAA arbitration is very expensive and not necessarily time efficient.
Good point, Dr. Wood. I have found that there is little appetite for using open court as the first option. Mediation and arbitration can be those first steps that help mitigate run-away court time and expense.
They should be a requirement, not "nice to have". While no one ever wishes to try to solve issues to that point, I can't imagine that a solid, best-practice contract that doesn't include this - unless the right to bring forward a suit for breach is preferred.
The answer honestly depends upon the relationship between the parties and what you hope to achieve through using an ADR (alternative dispute resolution) provision in your contract. As has been noted, mediation and arbitration are different things. But including one or both in a contract offer several benefits including confidentiality and the chance to mold the means by which your disputes are resolved. Consider consulting a seasoned attorney who is well versed in these ADR mechanisms who can guide you on how best to tailor your ADR provision to achieve maximum efficiency and optimal results best suited to fit the needs of your business.
It's always cheaper to mediate and you are not stuck with the result if you don't like it. The Court mediators take special training and they are pretty good. I would assume that their collegues in other businesses are likely well trained and honest.
It depends on the arbitration/mediation clause. Bring the document to my office, I will be happy to review it with you.