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Introduction to Mediation and Arbitration
Basic Principles of Negotiation, Mediation & Arbitration
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Introduction to Mediation and Arbitration

Society has taught us that a traditional, adversarial trial is the only civilized method of dispute resolution. But this system tends to have only one winner, with the other party necessarily being the loser. In the last decade, more and more people have voiced their dissatisfaction with this situation, and are demanding alternative methods of resolving disputes. The term "ADR" has been used for at least 30 years in North America, and refers to Alternative Dispute Resolution, including mediation and arbitration.

Mediation

Mediation is a sophisticated form of negotiation, facilitated by a mutually-acceptable third-party mediator. A mediator has no authoritative decision-making power; his purpose is to assist the disputing parties in voluntarily reaching their own mutually acceptable settlement of some or all the issues in dispute.

Arbitration

Arbitration is a voluntary contractual process, and the impartial third party (the arbitrator) must be agreed to by both parties. The arbitrator has decision-making authority. In arbitration, the arbitrator hears the arguments of both parties, and issues a ruling that is legally binding.

Why Choose ADR?

Traditional litigation can be costly, time-consuming and destructive to existing relationships, and it invariably leaves one party dissatisfied with the outcome. By turning to ADR, parties enjoy many benefits, including:
  • Costs: ADR methods often cost less than litigation.
  • Confidentiality: ADR methods are private and confidential.
  • Speed: ADR alternatives are typically faster than litigation. Quick resolution of a dispute can be an important objective, particularly when a business relationship continues while a dispute is being resolved.
  • Risk Reduction: Court decisions are unpredictable as opposed to a mediated settlement. To be fair, arbitrated settlements are also unpredictable.
  • Expertise of Decision Maker: A decision maker who has some expertise in a particular field may lower costs and increase the chances of a fair and reasonable resolution of a dispute.
  • Promotion of Continuing Business Relations: It is often important for corporations to preserve long-term relationships and keep hostilities to a minimum. ADR proceedings tend to be less adversarial and hostile than litigation.
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