Alternate Disputes Resolutions: Mediation and Arbitration

Going to trial is not the best option to resolve disputes. The majority of people use Alternative Dispute Resolutions or ADR, these procedures are less formal and controversial than going to trial to attain an agreement. Besides going to court people has the possibility to use other procedures, the most commonly used are mediation and arbitration.

An important advantage of ADR is that it saves time and money. Since there are rules and regulations that have to be followed in a trial, the procedure is more formal and sometimes people miss the opportunity to tell the story as they want. With ADR the outcome is frequently more positive, it prevents ending relations between persons, companies and organizations.

Mediation is the process in which parties find a solution that involves a neutral and impartial person who advises and assists them in the conciliation of their conflicts.

It is important to describe the role of the mediator in the process. The final decision is always going to be decided by the parties, however, the mediator helps as an advisor in different interests, identifying issues, avoiding communication problems and preventing confrontation between parties.

At the beginning of the process, the mediator’s purpose is to find a solution to stay away from litigation. The mediator has to be confidential with all the information received through the process and cannot utilize this information for any proceeding in the future against parties involved. The mediator has to listen to each party separately in order to find a solution based on documents and information not previously defined by the parties.

Mediation is mainly for minor disputes and is commonly used in any work-environment. For example when I was working as a Property Management Administrator in an International Real Estate Investment firm, most of the times we found mediation as the best tool to use between landlord and tenant. Even though the company works with clients between Ecuador and USA, mediation was used in all areas. The main mediator was a Real Estate Broker that found solutions for problems involving Landlord and tenant. In Ecuador mediation works in the same way as in USA and is regularly used, mainly because if the mediation doesn’t facilitate the procedures or if one of the parties does not accept the resolution, then they have to go trial, and in Ecuador the Legal System is not well-structured as in USA, and there is a possibility that trials would interfere with different interests and conflicts.

Arbitration on the other hand is when a neutral and impartial person called an arbitrator acts as an intermediary hearing arguments and evidence form each party to then decide the results of the dispute. Arbitration is also less formal than a trial and the rules for evidence are flexible. Arbitration could be binding or non-binding. Binding is basically when both parties agree that the arbitrator decision is final and there is no right to appeal an arbitrator’s final decision. Non-binding is almost the same as binding except that when the arbitrator decide the resolution it is not binding on the parties and most of the times parties choose to go to trail after the arbitrator decision.

Cases in which arbitration would be suitable includes when both parties want a person with the power to make the final decision of the dispute and they would like to avoid the