Alternative Dispute Resolution (ADR) refers to processes that use an impartial third-party who helps people communicate and collaborate to address tough issues, make decisions or resolve conflict. The use of ADR can save money by reducing expensive litigation costs and promoting more efficient and durable resolution of conflicts. Some ADR processes are used solely to foster better understanding or information sharing. When individuals seek resolution, ADR most often takes the form of mediation or arbitration. In Texas, we have a statute that provides certain requirements for court-referred ADR: see Chapter 154 of the Texas Civil Practice and Remedies Code.
Mediation is a process of communication in which persons with a dispute, assisted by a mediator, reach an agreement, understanding, or reconciliation. Mediators are facilitators; they are there to assist disputants who make their own decisions about resolution of their conflict. Mediators are neutral parties and impartial to the disputants and the outcome. Mediators are ethically bound not to impose an outcome or decision on either side.
What is Arbitration?
Arbitration is generally less formal than a court proceeding, though the parties may present evidence, or call and question witnesses. Unlike a mediator, the arbitrator renders a decision or award once the case is presented. Arbitration can be voluntary or mandatory and can be either binding or non-binding. The arbitrator is a decision-maker; the mediator is not. Most arbitrations stem from an arbitration clause in a contract, in which the parties have agreed to resolve any disputes through arbitration. Arbitration clauses can be simple – basically stating that claims will be settled according to applicable arbitration rules and then enforced by a local court. Arbitration clauses can also be more complex, governing a significant number of matters, such as how arbitrators will be selected, the location of the arbitration, who will be responsible for attorney’s fees, and if the final arbitration award must be kept confidential. Arbitration clauses are found in all types of agreements such as employment and consumer contracts, autos sales, credit cards, home repairs, and insurance. These arbitration clauses require that disputes arising out of contracts and transactions be resolved through arbitration. As independent arbitrators, Mediators of Texas can help you minimize costs and expedite the arbitration process. Mediators of Texas follows applicable American Arbitration Association (“AAA”) arbitration rules and procedures. Call us for further information regarding our fees and how to start the arbitration process.