In an effort for companies to mitigate their risk, many contracts contain arbitration clauses as the norm. This type of clause requires arbitration as a form of alternative dispute resolution if a dispute over the contract arises, and although such clauses are extremely useful in some cases and have helped many get on with business as usual after a dispute arises, they are not necessarily the best in all circumstances.
For those circumstances in which the parties want to maintain an on-going professional relation, mediation is often the best first choice. In fact, for many situations, especially those involving business partners or contract partners who wish to maintain a positive, on-going professional relationship, mediation works very well as a prerequisite to arbitration, and often helps parties involved in a dispute to avoid arbitration or litigation altogether.
Mediation encourages open communication and working together to reach a satisfactory conclusion to the dispute for all parties involved and helps ensure that all voices are heard openly in the exchange.
Mediation as a form of alternative dispute resolution is simply when parties agree to have a neutral, third-party mediator work with them to help them settle their dispute. However, even with the help of a mediator, the parties remain in complete control of the outcome of the mediation proceedings.
This means that although a mediator will assist the parties in dispute in reaching a resolution, that resolution is their decision, alone: a judge is not in control, a jury is not in control and lawyers are not in control. Maintaining this control over the process is one of the many benefits disputants find in the mediation process.
Not only do the disputants save time and money by choosing mediation--they also are able to negotiate a successful resolution on their own terms, while remaining in complete control of the situation. In addition, in those cases that mediation fails, the other avenues of arbitration or litigation are still available; however, it is comforting for people to know that they have a choice in the matter when attempting to resolve a dispute.