Alternative dispute mechanismsArbitration and MEDIATION

ARBITRATION & MEDIATION

Arbitration, conciliation and negotiation are important alternative dispute
mechanisms. These procedures may be utilised for virtually any subject area
as a replacement to the court procedure.
Arbitration, conciliation and negotiation describe processes whereby
two or more parties in a dispute attempt to reach a consensus
without recourse to the courts in an environment of compromise.
The process may be facilitated by an independent third party, in which
instance, it is more accurately described as arbitration. The essence of such
processes is that the parties are not bound by strict or rigid rules of
procedure but are guided by principles of appropriate conduct such as 'good
faith' bargaining.
An arbitration does not preclude the inherent jurisdiction of a superior
court to review the proceedings. Such a review can extend to an inquiry into
the conduct of the arbitration. One such instance is found in the case of Re
Heirs of Stanley Malaykhan.1 The court accepted that an arbitrator could
misconduct himself or herself by presiding over an irregularity in the
proceedings, such as a failure to give notice of the time and place of
meetings or by acting unfairly towards the parties by, for example, hearing
one party but refusing to hear the other. In the instant case, the court found
that the arbitrator was indeed guilty of misconduct, and declared the
arbitration award null and void since the arbitration was a nullity.
N.B. For the purpose of CAPE, you are required to pay special
attention to arbitration and mediation
Arbitration is the process by which a neutral third party hears the testimony
of both parties to the dispute in a relatively informal setting. Unlike
mediation, arbitration proceedings contain some elements of proceedings
conducted in a court of law.
In arbitration proceedings both parties must agree to come to the
bargaining table to commence arbitration. It is important for you to be able
to draw the distinction that, while in a court of law, the litigants do not have
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LC 2001 HC 29

a choice in deciding who the adjudicator is, with respect to arbitration the
parties to the dispute must decide and agree on the selection of an
arbitrator. After hearing and weighing the testimony, the arbitrator makes a
decision that can be deem binding on all the parties to the arbitration and an
order of the High Court may be obtained to in order to secure the
enforcement of the decision of the arbitrator.
The process of arbitration also allows all third parties involved,
including the arbitrator, to refer to statute and case law in support of their
respective arguments. The arbitrator is also free to apply general community
standards of fairness to assist him in arriving at a decision. In arbitration the
rules of evidence are less strictly applied and the arbitrator sits as the judge
of both law and fact.

Arbitration
Arbitration is a method of resolving disputes without going to court.
Sometimes an attorney will recommend arbitration to a client as the best
means to resolve a claim. In arbitration, the dispute is submitted to a third
party (the arbitrator) who resolves the dispute after hearing a presentation
by both parties. The presentation may be just documents submitted to the
arbitrator by each side. More often, in addition to the documents submitted,
each side will make an oral argument in person. Usually each side will have
an attorney to make the oral argument for them. Occasionally the
presentation also includes witnesses who testify.
Advantages
There are numerous advantages to arbitration as a way to resolve a case.
1.

The parties to the dispute usually agree on the arbitrator, so

the arbitrator will be someone that both sides have confidence will be
impartial and fair.
2.
The dispute will normally be resolved much sooner, as a date for
the arbitration can usually be obtained a lot faster than a court date. In
Virginia, a trial date is normally about twelve months from the date the
lawsuit is filed.
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3.

Arbitration is usually a lot less expensive. Partly that is because

the fee paid the arbitrator is a lot less than the expense of paying expert
witnesses to come and testify at trial. (Most of the time the parties to
arbitration split the arbitrator's fee equally). There are also lower costs in
preparing for the arbitration than there are in for preparing for a trial.
Partly this is due to the fact that the rules of evidence are often more
relaxed than in a trial, so that documents can be submitted in lieu of
having a witness come to trial and testify. For instance, if a claimant has
several doctors who are out-of-state, the cost of bringing them to trial or
going out-of-state to take their depositions may be prohibitive for trial,
but in arbitration you can usually use just their records and reports.
4.
Unlike a trial, arbitration is essentially a private procedure, so
that if the parties desire privacy then the dispute and the resolution can
be kept confidential.
5.
Since arbitration is binding, there are very limited
opportunities for either side to appeal, so the arbitration will be the
end of the dispute. That gives finality to the arbitration award that is not
often present with a trial decision.
Disadvantages
There are, however, also some disadvantages to arbitration as a method of
resolving a dispute.
1.

If arbitration is binding, both sides give up their right to an

appeal. That means there is no real opportunity to correct what one
party may feel is an erroneous arbitration decision.
2.
If the matter is complicated but the amount of money involved
is modest, then the arbitrator's fee may make arbitration
uneconomical. It may be cheaper to try the case before a judge in
general Court, where medical evidence can be presented by affidavits
instead of paying the doctor to testify.
3.
Rules of evidence may prevent some evidence from being
considered by a judge or a jury, but an arbitrator may consider
that evidence. Thus, an arbitrator's decision may be based on
information that a judge or jury would not consider at trial.
4. If certain information from a witness is presented by documents, then
there is no opportunity to cross-examine the testimony of that
witness.
5. The standards used by an arbitrator are not clear, although
generally the arbitrator is required to follow the law. However, sometimes
arbitrators may consider the "apparent fairness" of the respective
parties' positions instead of strictly following the law, which would result
in a less favorable outcome for the party who is favored by a strict
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reading of the law. Although this issue has been present since antiquity,
Aristotle said "an arbitrator goes by the equity of a case, a judge by the
law, and arbitration was invented with the express purpose of securing
full power for equity."
In sum, arbitration is a very useful tool for resolving disputes, but
careful consideration has to be given as to whether it is applicable to or
preferable in a particular dispute. Your attorney will advise you if it is
appropriate in your case.
Mediation
Like arbitration, mediation also employs the service of a third party referred
to as a mediator, who most often acts as a shuttle between the two parties,
communicating the position of the disputants to one another as they try to
reconcile their differences towards the achievement of a settlement. The
mediator acts as both judge and jury holding separate meetings or caucuses
at which further clarification may be obtained as it regards the position of the
respective parties with views towards suggesting possible advances by which
the agreement may be reached. These caucuses are conducted in private
and the findings are not revealed to the other side unless each party
approves.
Some of the advantages of mediation are:
It is time and cost effective
Confidentiality is maintained
Fairness and flexibility are promoted
It has shown reliability in terms of compliance with final decisio

Additional Advantages of Mediation

1. Mediation is relatively inexpensive. Seeing a case through trial is an
expensive proposition.
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2. Mediation is relatively swift. There is no dearth of mediators ready and

willing to assist parties whose goal is to try to settle a matter. A quick
web search will result in hundreds of mediators and mediation
websites, some specializing in certain types of cases and some more
experienced and able than others. Mediation does not run by a clogged
court schedule and sessions can be easily scheduled any time at the
mutual convenience of the parties and the mediator, and can take
place in a variety of locations.
3. Mediation is relatively simple. There are no complex procedural or
evidentiary rules which must be followed. While most would agree that
a general rule of fairness applies, the maximum penalty a party can
impose for foul play is to walk away from the mediation and take his
chances in court.
4. Mediation allows the parties to revise and adjust the scope of their
conflict. In a trial, initial pleadings and rules of procedure limit the
issues which a party can raise. In mediation, as circumstances change
so can the topics up for discussion. This increased flexibility makes it
easier for negotiators to act as problem-solvers instead of adversaries.
5. Mediation allows for flexible solutions and settlements. The relief
available in court is usually based on pecuniary damages, and
equitable relief is hard to come by. In mediation, however, the parties
can agree to a settlement requiring, or restraining, action by one party
which was not originally envisioned as something beneficial to the
other party.
6. Settlements reached in mediation are more agreeable to both parties
than court judgments. Because any settlement arrived at through
negotiation is necessarily agreed to voluntarily by both parties,
obligations under the agreement are more likely to be fulfilled than
obligations imposed by a court.
This list is by no means exhaustive, but at least presents a framework in
which we can consider the advantages of mediation. In addition, there is a
similar list which can be constructed in which we can start to consider some
of the typically mentioned disadvantages of mediation.
1. Mediation does not always result in a settlement agreement. Parties

might spend their time and money in mediation only to find that they
must have their case settled for them by a court. Opting for mediation,
therefore, presents something of a risk. Further, if mediation fails,
much of a partys ammunition might have already been exposed to
the opposing party, thereby becoming far less useful in the ensuing
trial.
2. Mediation lacks the procedural and constitutional protections
guaranteed by the federal and state courts. The lack of formality in
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mediation could be a benefit, as noted above, or a detriment.

Mediation between parties of disparate levels of sophistication and
power, and who have disparate amounts of resources available, might
result in an inequitable settlement as the less-well positioned party is
overwhelmed and unprotected.
3. Legal precedent cannot be set in mediation. Many discrimination

cases, among others, are brought with the intention of not only
securing satisfaction for the named plaintiff, but also with the hope of
setting a new legal precedent which will have a broader social impact.
These cases are only successful if a high court (usually the United
States Supreme Court) hands down a favorable decision on the main
issue. Mediation is therefore not beneficial for such cases.
4. Mediation has no formal discovery process. If one of the parties to a

dispute cannot fully address the case without first receiving

information from the other party, there is no way to compel disclosure
of such information. The party seeking disclosure must rely instead on
the other partys good faith, which may or may not be enough.

Activity:
Activity 2.3
Mr John Muir entered into a contract with B.V. Enterprises to construct a
bridge for the company. Mr Muir fails to complete the bridge on time so the
company refuses to pay him the remainder of the money owed to him under
the terms of the contract. Mr Muir would like to have his problem solved but
is afraid of courts.
Advise Mr Muir of all the options of dispute resolution available to him
and explain to him why you have chosen either mediation or arbitration to
handle this matter.
Feedback
A good response to this question should first state that there are different
methods of dispute resolution including the traditional court system to which
parties can resort for help. There is also the office of the Ombudsman and
there are those methods of resolution of disputes known as ADR. You should
then state that since Mr Muir is afraid of courts and since assistance from the
Ombudsman is limited to problems occurring between individuals and State
entities, the alternative open to Mr Muir would be one of the processes
available under ADR.
Note: This question requires that you select only one of the ADR methods
available for your answer. You may wish to choose either mediation or
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arbitration. Finally, you should discuss the advantages of the ADR pro cess
that you have chosen.

Reference
Allen, C, R. (2016). Arbitration: advantages and disadvantages. Retrieved
from http://www.alle
nandallen.com/blog/arbitration-advantages-and-disadvantages.html
Antoine, B, R. (2008). Commonwealth Caribbean Law and Legal Systems (2
ed.). New York, USA:
Routledge-Cavendish Publishing.