Alternative Dispute Resolution: Mediation and Arbitration Services
The term Alternative Dispute Resolution (“ADR”) refers to processes for resolving disputes by means other than litigation. As a general rule, the judicial system is not the most efficient or cost-effective forum for resolving legal disputes. Litigation can be both time-consuming and expensive. As a result, companies and individuals have increasingly opted to pursue alternative methods to resolve legal disputes. Even if the parties elect to pursue litigation, they will probably engage in ADR, because Minnesota courts generally require the parties to participate in some form of ADR before they can proceed to trial. The most common forms of ADR are Mediation and Arbitration.
Mediation (Civil)
Mediation is a relatively informal process in which a neutral person meets with the disputing parties to facilitate discussion and to help the parties reach an agreement. A mediator has no power to impose a decision on the parties. Mediated settlement agreements can be legally binding and generally are more satisfactory to the parties than a court decision because the parties create their own solution rather than having an outcome imposed on them by a third person.
Mediation (Family Law)
Effective family law mediation equires more than extensive experience and knowledge of the law. An effective family law mediator must have the ability to quickly distill the issues in order to provide parties with an unbiased assessment of the case.
Arbitration
Arbitration is a process in which a neutral person conducts a formal hearing in which the disputing parties each have an opportunity to present their case. After the hearing, the arbitrator renders a decision. The parties agree in advance whether or not the arbitrator’s decision will be legally binding.
Med-Arb
Med-Arb is a process in which the parties sign an agreement stating they will first mediate their dispute, and then submit any unresolved issues to legally binding arbitration. Med-Arb enables the parties to control the outcome of the dispute to the extent they are able to reach an agreement and provides an efficient process to resolve any issues that the parties cannot resolve for themselves.
Selecting a Mediator or Arbitrator
Parties generally choose a neutral who has education, training and experience that is relevant to the dispute. If the neutral has knowledge in a specific area of law, then the parties can spend less time educating the neutral and more time focusing on the merits of the case. A mediator who has expertise in the relevant areas of law can understand the parties’ positions and underlying interests and facilitate creative and practical solutions. An arbitrator who has expertise in the relevant areas of law is more likely to render a decision that is consistent with law and common practice.
If the dispute is in litigation, the mediator selected by the parties must be a Qualified Neutral under Rule 114 of the Minnesota General Rules of Practice. To become a Qualified Neutral, a person must (i) complete a training program that has been certified by the State Court Administrator (or receive a waiver based on training and experience that clearly demonstrate exceptional competence), and (ii) be listed on the State Court Administrator’s Civil Neutral Roster or Family Law Neutral Roster.
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