Arbitration vs. Mediation

I have never been a big fan of arbitration. I have found that the supposed cost savings and speed of arbitration as compared with litigation are often illusory, and the results of arbitration are often, well, arbitrary. I am also opposed in general to pre-dispute arbitration clauses. If both parties want to arbitrate–and there are certainly cases where it is appropriate–they can always agree to do so after a dispute arises. Whatever the supposed advantages of arbitration, it seems to me hard to justify forcing a party to sign an arbitration clause in advance of a dispute. I had the chance last year to vindicate my principles in a case I won before the Sixth District Court of Appeal in California, Abramson v. Juniper Networks.

In that case, the court held among other things that it was unconscionable for an employer to force employees to arbitrate all employment-related disputes, where the company “carved out” the right to sue the employee in court for violations of the employees’ confidentiality obligations. In other words, if arbitration is good enough for one side, it has to be good enough for both.

Now, mediation on the other hand, I think is generally a very useful process. One reason is that even if the case does not settle after a mediation, the process gives the parties a much clearer idea of their alternatives. At the end of a day of mediation, the parties have a better sense of the costs and risks of taking their case to trial, and they also know how much they have to pay, or accept, to buy their way out of the lawsuit. Then they are free to make a decision that is in their best, perceived interests. I have frequently acted as a mediator, and also frequently represent parties in mediation. I almost always advocate giving mediation a try.

The problem with mediation is that it is only beginning to be integrated into the litigation process. At the moment, it exists as either an alternative, or as another step the courts are requiring the parties to accomplish on the road to trial. I believe a great deal more could be done to make mediation an integral part of the litigation process. Many disputes within a lawsuit, for example, could be mediated: in particular, discovery disputes. Encouraging parties to adopt a process of negotiation and settlement of such disputes puts them on the road toward settlement of the entire case, and may help achieve results that the parties are more satisfied with, even if the entire case does not settle.

Leave a Reply