Alternative dispute mechanisms-

Arbitration 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 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

1
LC 2001 HC 29
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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.
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.
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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 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.

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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.
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
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 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 party’s “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 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 party’s 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.

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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 arbitration. Finally, you should discuss the
advantages of the ADR process 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.