
Joel N. Kreizman
Partner
732-568-8363 jkreizman@sh-law.comFirm Insights
Author: Joel N. Kreizman
Date: August 6, 2020
Partner
732-568-8363 jkreizman@sh-law.comWith courts shuttered for several months, COVID-19 has exacerbated New Jersey’s existing legal logjam. The number of backlogged cases this May was 153 higher than May 2019, according to the Administrative Office of the Courts.
With court cases proceeding slowly, litigants are understandably looking at other options. For some, mediation and arbitration can provide a solution, as they allow cases to be resolved outside the courtroom. However, before choosing to proceed with either dispute resolution alternative, it is important to fully understand how it will impact your legal rights.
In arbitration, a neutral individual or group of individuals (either an arbitrator or an arbitration panel) is appointed to resolve the dispute. In some cases, the parties can select arbitrators who subject matter experts that are knowledgeable about complex areas of law, such as intellectual property, insurance, or securities law.
Arbitration generally proceeds more quickly than court proceedings and, therefore, is often less costly. Like a court proceeding, arbitration generally involves hearings and the submission of documents. However, it has its own set of rules, which are generally much less formal than court proceedings. Unlike mediation, it is important to note that the arbitrator’s decision is generally final and binding on the parties. That, of course, means there is usually no appeal from an arbitrator’s decision. If a party believes the decision is improper, arbitrary, or fails to follow applicable law, it is nevertheless stuck with that decision.
In mediation, a neutral third party is called on to help negotiate the differences in the parties’ positions in order to lead to settlement of all or some of the issues in dispute. Unlike a judge or jury, the role of the mediator is to help the parties find common ground rather than make any binding decision regarding the dispute.
Mediation is fairly informal. During mediation, the parties and their counsel typically have the opportunity to meet privately with the mediator. During these sessions, you can clarify issues and answer questions that the mediator may have about your positions. While a court is limited to determining ultimate relief, i.e., liability and damages, mediators are free to propose creative solutions.
While mediation is not binding upon the parties, statistics show that about 80 percent of claims mediated in the federal courts ultimately settle. Even when mediation is not successful at fully resolving the case, it can often narrow the issues that remain in dispute and require court resolution.
Both mediation and arbitration are forms of alternative dispute resolution (ADR), as they are an alternative to traditional court proceedings. Prior to COVID-19, ADR had some advantages over litigation. Below are several that are even more relevant today:
Despite the benefits discussed above, ADR isn’t the best fit for resolving every complex commercial matter. Accordingly, it is important for clients and their counsel to carefully evaluate the risks and benefits of each course of action.
If you have any questions or if you would like to discuss the matter further, please contact me, Joel Kreizman, or the Scarinci Hollenbeck attorney with whom you work, at 201-896-4100.
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