Opting for mediation in mandatory arbitration cases – Part I

The Wall Street Journal recently ran a Family Finances article titled “Trading Dispute? Try Mediation.”

The article addresses head-on a couple of common questions about mediation. First, the parties to a dispute may have agreed in advance (say, in a consumer or brokerage contract) to pursue mandatory arbitration if a dispute arises during the life of the contract. These agreements have their critics. What is important for this discussion is that parties who enter into these agreements are waiving only a right to pursue a court remedy.

Second, these waivers do not affect the ability of parties in conflict to decide, at any time, that they choose to pursue mediation. The key concept is that mediation is a voluntary process: if all of the parties to a conflict decide it is in their best interests to try to work out their differences with the assistance of a neutral, trained mediator, the parties can enter into the mediation process. They are not compelled to continue with the arbitration process.

Third, if the parties can reach a mediated agreement that each party feels will resolve the conflict in a satisfactory fashion, they are free to do so. Again, the parties can end the dispute as they see fit and are not required to then appear before an arbitrator.

Posted in ADR: Dispute Resolution Processes, Business Mediation, Saturday, November 10th, 2007

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