Mediation & Arbitration – Positive Alternatives in Dispute Resolution

When two parties try to settle a legal dispute, litigation is often the method used to try to resolve these disputes. Litigation is frequently costly, time consuming, and can wear down both sides. Whether it is a shareholder dispute, valuation issues in a divorce, determination of damages, or the fairness of a transaction, the professionals at The Zitelman Group ("TZG") and Valuation Services, Inc. ("VSI") are frequently hired to help resolve these tough issues. In addition, we are there to provide alternatives to litigation.

Alternative Dispute Resolution ("ADR") is gaining increased recognition and widespread use across the country. ADR is a range of negotiation and dispute resolution techniques used to resolve various conflicts. These methods are used as alternatives to litigation. Outcomes often are advantageous to all parties, a rare event in litigation. Corporations, families and individuals with ongoing relationships can resolve conflicts in a way that is beneficial to all participants. Benefits include lower costs, more certain outcomes and speedy, private resolution.

Two types of dispute resolution methods are Mediation and Arbitration.

What is Mediation?

Mediation is a process in which the parties that disagree, their representatives and an independent mediator meet to reach a mutually satisfactory settlement, rather than determining which party is right. The mediator has no power to impose a decision or to force the parties to accept a settlement.

The process begins with a discussion of the dispute by the parties, without the formal presentation of witnesses and/or evidence as in a trial. The mediator assists the parties in negotiations to determine the strengths and weaknesses of each side’s case. The mediator then suggests a reasonable resolution of the dispute.

Mediation is voluntary and non-binding. Either party may reject the mediator’s recommendation. If a settlement is not reached, any statements made during the meeting are inadmissible in any future litigation.

Stages of Mediation

1. The Agreement to Mediate. A written agreement must be made stating that the parties agree that their dispute will be conducted under mediation rules.
2. Selecting the Mediator. After fully understanding the mediation process, a mediator should be selected with the appropriate experience, style and ethics. A mediator should remain neutral and treat both parties with fairness and respect.
3. Preparing for Mediation. Both parties should define and analyze the issues involved in the dispute and be prepared to present all evidence and documentation they feel will be necessary to discuss their respective cases.
4. The Mediation Session. The session typically begins with a joint meeting of the Mediator, the parties and their attorneys. The attorneys for each party are asked to present their case. After the joint meeting, private, confidential meetings are held between the mediator and each party to analyze their case and develop options for settlement.
5. Settlement. If an agreement is reached, the terms of the agreement are put in writing executed by both parties and the case is settled. If an agreement is not reached, the parties may submit to binding arbitration. A Mediator is usually not the Arbitrator as arbitration generally begins with a clean slate.

What is Arbitration?

Arbitration is a forum where disputing parties present their case to an impartial third party (referred to as a neutral or Arbitrator) for the purpose of making a determination which may or may not be binding. The Arbitrator usually has expertise in the subject matter area.

The agreement to arbitrate is the first and most important step in this process. Once the agreement is reached, a claim is filed and the process is set in motion.

In selecting an Arbitrator(s), careful consideration should be maintained in selecting a neutral person(s) based on the nature of the dispute, geographical location and industry knowledge of the neutral person(s).

A binding decision is made within the limits of the arbitration agreement by the Arbitrator based on the matters submitted at the hearing. Arbitrators are not always required to write opinions explaining the reasons for their decision unless a "reasoned award" has been requested. Binding arbitrations are usually enforceable in a court of law. Arbitrators are given wide latitude, including the ability to issue subpoenas.

Stages of Arbitration

1. The Agreement. This is the most important stage in initiating arbitration. The agreement to arbitrate is a written contract executed by both parties.
2. Selecting the Arbitrator. An Arbitrator(s) should be carefully selected and agreed upon by both parties based on the nature of the dispute, the location and the qualifications of the neutral.
3. Preparing for Arbitration. Since an award will be made on the basis of the facts and exhibits presented at the hearing, it is essential that both parties assemble all documents into an orderly presentation and all witnesses understand the case and the importance of their testimony.
4. Arbitration. Like court trials, the parties present their cases in an orderly manner including an opening statement, the award sought, examination of witnesses, and closing statement. After both parties have presented their cases, the Arbitrator declares the hearing closed and has 30 days to render an award.
5. The Award. The award is made by the Arbitrator based on the evidence submitted and under the limits of the arbitration agreement. The decision may or may not be binding, depending on the Agreement.

How does Mediation Differ From Arbitration?

Arbitration is not as formal a litigation, and mediation is even less formal than arbitration. An arbitrator has the power to render a binding decision. A Mediator does not. In Arbitration, evidentiary hearings are held by which arbitrators hear testimony on which they render an award. A Mediator conducts informal joint and separate meetings with the disputants to gain understanding of the issues in order to structure a settlement.

Let us help!

The Zitelman Group is qualified to provide these services. Stuart Bassin is an Arbitrator with the American Arbitration Association ("AAA"). He has completed the Arbitration I and II courses through the AAA. Rick Zitelman provides mediation services and has completed 40 hours of mediation training through the Maryland Institute for Continuing Professional Education of Lawyers, Inc. ("MICPEL").

Please call either Stuart Bassin or Rick Zitelman if you would like to discuss further the benefits and opportunities of either Arbitration or Mediation at 301-770-2077 or visit our new web site at www.tzg.com.

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