Mediation Is the Best Means of Dispute Resolution

By Taichert, Robert D. | The CPA Journal, April 2006 | Go to article overview

Mediation Is the Best Means of Dispute Resolution


Taichert, Robert D., The CPA Journal


Most people live by the rules, and parties agree to contracts and fulfill their legal obligations to act in good faith and fair dealing. Misunderstandings, however, do happen, agreements are sometimes incomplete or one-sided, unforeseen circumstances arise, and conflict is inevitable. The question is how to solve problems when they arise.

Four Methods

The United States has four recognized means of dispute resolution. It is important to have this range in mind and to differentiate when one is in dealing with a given disagreement or dispute.

Negotiation. The key is good-faith negotiation. People who negotiate recognize that they have to give something to get something. The parties control both the process and the outcome. When the parties have achieved a meeting of the minds, they craft an agreement to reflect the deal they made. The matter is resolved on terms developed by the parties and acceptable to both sides. When parties are unable to negotiate a satisfactory resolution, they may need help.

Mediation. A mediator's job is to separate the people and their emotions from the problem, to get the parties to address the problem, and to find an accommodation of the conflicting interests that all the parties can accept. Sometimes the problem is solved and relationships are restored and improved. Sometimes all parties breathe a sigh of relief when the episode is at an end.

When negotiation fails, mediation is by a wide margin the best mechanism to resolve disputes. In mediation, the parties can craft their own solution with the help of a mediator, which is a far better solution than letting a third party decide, whether it be an arbitrator, judge, or jury. The key to the success of mediation is that the parties control the process and the outcome. The only commitment that parties make in a mediation is that they will negotiate in good faith to try to reach an agreement acceptable to both sides. The difference between negotiation and mediation is that in mediation a disinterested third person, the mediator, participates in the process with the parties' permission. The key to a mediator's success in helping the parties reach an agreement is to separate the people from the problem. In other words, a mediator helps the parties look at their economic interests, not their positions. Mediators do reality checks, communicating to the parties that the dispute will end someday. The question for the parties is whether they prefer to craft their own solution, or whether they think a third party or entity is more likely to come up with a desirable solution. Mediation is entirely voluntary. No one is bound to anything, except to negotiate in good faith until an agreement can be reached The agreement is put in writing, and both parties sign this binding, enforceable contract. The parties know the facts and where their economic interests lie far better than any decision-making tribunal would. The solution crafted by the parties clearly spells out their respective rights and obligations, binds both sides, and is enforceable in court.

Arbitration. Arbitration is not nearly as effective as mediation, but it is far better than litigation. In exchange for privacy, relative simplicity, lower expense, and a more rapid result, the parties to the dispute agree that an arbitrator's decision will be binding, and give up the right to appeal. …

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