decided to be subject to binding arbitration relinquish their constitutional right to settle their dispute in court.
It is the FAA that allows parties to confirm their awards, as will be discussed in the following chapters. When
considering negotiation laws, it is important to keep in mind that each state has laws with their own definitions
and nuances. While the purpose of the Uniform Arbitration Act in the United States was to provide a uniform
approach to the way states handle arbitration, it has only been adopted in some form by about 35 states.
2.2
Mediation
Court or Agency-Connected Mediation
Mediation is a method of dispute resolution that relies on an impartial third-party decision-maker, known as a
mediator, to settle a dispute. While requirements vary by state, a mediator is someone who has been trained
in conflict resolution, though often, he or she does not have any expertise in the subject matter that is being
disputed. Mediation is another form of alternative dispute resolution. It is often used in attempts to resolve a
dispute because it can help disagreeing parties avoid the time-consuming and expensive procedures involved
in court litigation. Courts will often recommend that a plaintiff, or the party initiating a lawsuit, and a
defendant, or the party that is accused of wrongdoing, attempt mediation before proceeding to trial. This
recommendation is especially true for issues that are filed in small claims courts, where judges attempt to
streamline dispute resolution. Not all mediators are associated with public court systems. There are many
agency-connected and private mediation services that disputing parties can hire to help them potentially
resolve their dispute. The American Bar Association suggests that, in addition to training courses, one of the
best ways to start a private mediation business is to volunteer as a mediator. Research has shown that
experience is an important factor for mediators who are seeking to cultivate sensitivity and hone their conflict
resolution skills.
For businesses, the savings associated with mediation can be substantial. For example, the energy corporation
Chevron implemented an internal mediation program. In one instance, it cost $25,000 to resolve a dispute
using this internal mediation program, far less than the estimated $700,000 it would have incurred through
the use of outside legal services. Even more impressive is the amount it saved by not going to court, which
would have cost an estimated $2.5 million.
Mediation is distinguished by its focus on solutions. Instead of focusing on discoveries, testimonies, and expert
witnesses to assess what has happened in the past, it is future-oriented. Mediators focus on discovering ways
to solve the dispute in a way that will appease both parties.
Other Benefits of Mediation
•
Confidentiality. Since court proceedings become a matter of public record, it can be advantageous to use
mediation to preserve anonymity. This aspect can be especially important when dealing with sensitive
matters, where one or both parties feels it is best to keep the situation private.
•
Creativity. Mediators are trained to find ways to resolve disputes and may apply outside-the-box thinking
to suggest a resolution that the parties had not considered. Since disagreeing parties can be feeling
emotionally contentious toward one another, they may not be able to consider other solutions. In
addition, a skilled mediator may be able to recognize cultural differences between the parties that are
influencing the parties’ ability to reach a compromise, and thus leverage this awareness to create a novel
solution.
•
Control. When a case goes to trial, both parties give up a certain degree of control over the outcome. A
Chapter 2 Disputes and Dispute Settlement
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