There are three forms of formal dispute resolution to resolve a legal dispute which informal negotiations have fulfilled: mediation, arbitration, or litigation. Understanding the benefits and drawbacks of each is important to decide which method is best to resolve a dispute.
Mediation is a process where a neutral third party assists in resolving the dispute. Mediators are typically lawyers or retired judges who have extensive experience in the field in which parties have a dispute. The decision to settle is always up to the parties. Mediators do not have the power to issue a binding decision. Instead, mediators can often provide their opinion on how they believe matters will be resolved through a litigation or an arbitration and lead the parties to agree by explaining the strengths and weaknesses of each others’ case.
Mediators will often ask the parties to submit confidential written statements and documents that support the parties position to the mediator before the mediation. On the day of the mediation, the parties will meet at a pre-arranged location with the mediator. The process typically involves the parties providing a short explanation of their side of the case to the mediator. The parties will then break into separate rooms and the mediator will shuttle between rooms to discuss the dispute and a resolution.
Mediation is typically confidential. Mediations resolve disputes quickly and are far less expensive than arbitration or litigation, and allow the parties to control the outcome.