Save on Court Fees – When to Consider Mediation and Arbitration of Disputes

What Chief Justice Burger went on to say is that our civil jus­tice system is too costly, too painful and too inefficient for a civilized society. In response to these problems—noted by the Chief Justice over 25 years ago—many people today choose mediation and arbitration, instead of litigation, to resolve their disputes. In this article, we will look at the benefits of these “alternative dispute resolution” methods.

Mediation

Mediation is a process in which a neutral person (the “mediator”), often a retired judge, assists the parties in reaching their own settlement, but the mediator does not have the authority to make a binding decision. Before becoming a mediator, a person must generally complete a minimum number of hours of mediation training.

In the superior court, the parties are required to confer early in the case about the possibilities for a prompt settlement or resolution of the case and whether they might benefit from participating in some alternative dispute resolution (ADR) process. Within 30 days after their conference, the parties must inform the judge about any ADR agreements or possibilities. The superior court and justice courts strongly encourage mediation of disputes, and many courts sponsor mediation programs.

During mediation, each party is given a chance to explain his position to the other party and to the mediator. The mediator will help the parties explore different solutions to their problems. The purpose of mediation is not to prove which party’s version of the facts is true, but rather to discuss the problems and potential solutions.

A mediator will not force any party to agree to a solution against his wishes. However, if the parties voluntarily reach a settlement, the mediator will assist the parties in putting the settlement in writing. Under the court rules, a written settle­ment reached through mediation is binding. The parties may then submit the agreement to the judge for approval. If the parties do not reach a settlement through mediation, they may take their case to court the same as though mediation had never occurred. All statements made during mediation are confidential, and may not be used by either party against the other in court.

Arbitration

Arbitration is the submission of a dispute to one or more impartial persons for a final and binding decision. Arbitration may be required by the terms of a contract, or it may be ordered by the court in cases involving relatively small amounts. We will deal here with arbi­tration agreed to by the parties in a contract.

Arbitration clauses are typically contained in insurance policies, construction contracts, real estate contracts, sales con­tracts, and employment agreements. A written agreement to submit a controversy to arbitration will be enforced by the courts in Arizona. If one party to an arbitration agreement refuses to arbitrate, the other party may obtain an order from the superior court to compel arbitration. The public policy of Arizona favors the arbitration of disputes between parties.

If the arbitration agreement provides a method of appoint­ment of arbitrators, that method will be followed. In the absence of an agreed method, the superior court judge will appoint one or more arbitrators. The power of the arbitrators will be exercised by a majority, unless otherwise provided by the agreement or by law.

Unless otherwise provided in an arbitration agreement, the arbitrators will appoint a time and place for the hearing, and so notify the parties. The parties are entitled to be heard, to present evidence, and to cross-examine witnesses appearing at the hearing. Any party has the right to be represented by an attorney at the arbitration hearing.

At the end of the arbitration hearing, the arbitrator or arbi­trators will issue an award. The award may include provisions for the payment of attorney’s fees and costs by one party to the other. Either party may file an application with the superior court to confirm the arbitration award. The court will confirm the award, unless it finds it was obtained by corruption, fraud, or other undue means or it is defective for some other legal reason. In extreme cases, the court may order that another arbitration be held. Once an arbitration award is confirmed, it has the same force and effect as a judgment of the court.

The American Arbitration Association (AAA) often is des­ignated by parties entering into an arbitration agreement. The AAA has administered over two million cases since its estab­lishment in 1926. It presently handles nearly a quarter million cases a year, and is the nation’s largest ADR provider. The AAA maintains a panel of about 7,000 arbitrators and mediators worldwide, and many of them are bilingual or multilingual. It has offices in all major cities.

For additional ADR information, the reader may wish to visit the Maricopa County Superior Court’s Web site, www.superiorcourt.maricopa.gov/superiorcourt/alternativedisputeresolution/index.asp, or the AAA’s Web site, www.adr.org. Both are excellent sources of information.