Mediation Vs Arbitration for My Personal Injury Case?
Our three branches of government are the executive (president), legislative (congress) and judicial (courts). The court system (like the other branches of government) faces real budget restraints and cuts, particularly in major cities like New York. The legal system is a vital part of our society as the courts decide our legal disputes.
But litigation and getting your day in court is a time consuming process, plagued with court calendar congestion, adjournments and delays. It is common for court conferences to take months and months to be scheduled and for adjournments between the many court conferences to be months and months apart. It is common for court decisions and orders on motions to take half a year or so to be issued (compounded if there’s more than just one motion in a case). It is common for cases that have already been certified ready for trial to remain on the court’s trial calendar for years before they get before a trial judge for trial.
Hence, there comes alternative dispute resolution (ADR). Mediations and Arbitrations are alternative venues to decide legal disputes. Mediations or arbitrations require the consent of both parties (plaintiff and defendant). If there’s consent to proceed to a mediation or arbitration, the parties need to mutually consent to the private ADR company, such as American Arbitration Association (AAA), National Arbitration and Mediation (NAM), Settlement Services Arbitration and Mediation (SSAM), etc. The parties then need to agree to the selection of a mediator or arbitrator (usually referred to as the neutral). Most times one mediator or arbitrator is selected (but at special times a panel of three, which increases the cost). Lastly, the parties need to consent to the issues and parameters of the mediation or arbitration. That is will the issues of liability and damages be mediated or arbitrated or one or the other. And as to monetary compensation, will there be a cap on the award?; that is, will the monetary compensation be capped at a certain amount, usually the policy limits of the defendant’s insurance company. The major difference between mediation and arbitration is that mediation is non-binding and arbitration is binding. Arbitration results are in a final and binding formal case decision and award whereas mediation narrows or clarifies the legal issues and respective case arguments and renders recommendations on the legal issues and the settlement value of the case. Mediations may also be useful in terms of ascertaining information or insight from each party’s respective position.
An arbitration example is in a rear-end motor vehicle accident, where liability is presumed, and the parties consent to arbitrate only damages capping the award to say the policy limit of $100,000 and guaranteeing a minimum award (a floor) of say $10,000. This allows each party to manage its risks and uncertainties. If the arbitrator’s award is say $150,000, the plaintiff will receive $100,000, the cap. The insurance company managed its exposure and protected its insured above the policy limit. If the plaintiff’s injuries are found by the arbitrator not to be serious and the case is dismissed, the plaintiff will nevertheless receive $10,000, the guaranteed minimum. The plaintiff still walks away with some money and successfully managed that risk. Arbitration awards are final and not appealable, unless arbitrary and capricious, which is rare and a very high standard to prove. A major trade-off in selecting an arbitration to resolve your case is that you forego your right to your day in a court of law, and that means you waive your right to a jury trial, to be judged by your peers in the community. For this very reason alone, Michael Manoussos & Co PLLC may engage in arbitrations only if warranted by the case facts and circumstances.
Mediations unlike arbitrations do not render awards but after discourse make recommendations and suggestions as to legal issues and case valuations. Arbitrations are like a mini-trials but somewhat informal, especially with the rules of evidence. It is very common for an arbitration or mediation to be completed in an hour or two or so, compared to days or weeks with a trial in a court of law.
Mediations and arbitrations are not free. Each party pays for it. The mediators and arbitrators are usually retired/former judges and experienced/trained attorneys. You pay for their time to review the documents submitted on behalf of your case, to conduct the hearing and to draft a decision and award. Rates differ depending on the ADR company and on the mediator/arbitrator.
The benefits are that mediations and arbitrations can be set-up quickly and resolve disputes expeditiously. In general, ADR is cost effective and time efficient. Mediations or arbitrations can be scheduled in weeks to resolve cases. Though each party pays for a filing fee and the for the time of the mediator or arbitrator, compared to trial costs it is considerably way less expensive. Expert witnesses like doctors are usually not called to testify at arbitrations and trial preparatory services are not needed, which are a drastic financial savings for the client.
The challenges in mediations and arbitrations are in the selection of the mediator and arbitrator. Though they are neutrals, each party seeks to select a mediator or arbitrator who is perceived as pro-plaintiff or pro-defendant, respectively. In this regard, mediations and arbitrations can be somewhat political, if you will. From a practical perspective, ADR may aim to please both parties, as it is a private business; hence, there may be no grand slam for either side.
The question then becomes should I take my case to mediation or arbitration? The answer to this question mandates a case-by-case evaluation. There are many factors and intangible variables that a personal injury attorney requires to review and assess (the subject of another blog). There are subtleties and nuisances that only the judgment of a knowledgeable and experienced personal injury trial attorney can properly evaluate. There are pluses and minuses with the courts and ADR; each has its strengths and weaknesses, which only an experienced personal injury and trial attorney can evaluate vis-à-vis your case.
The philosophy and practice of Michael Manoussos & Co PLLC is to prepare every case for trial and to take every case to trial and verdict unless it settles for a fair and reasonable amount for the client or the facts and circumstances are such that warrant a mediation or arbitration. Sometimes it’s worth waiting for your day in court!