Scarinci Hollenbeck, LLC, LLCScarinci Hollenbeck, LLC, LLC

Firm Insights

Mediate or Arbitrate? Which Works Best for You?

Author: Scarinci Hollenbeck, LLC

Date: September 17, 2015

Key Contacts

Back

To mediate or arbitrate. That is the question.

Recording artists and their labels often get into disputes over their contracts, and when this happens there are typically three options: Litigate, mediate or arbitrate. Often it is best, and less costly, to avoid the first option, so, what is the difference between mediation and arbitration?

Any given recording contract may include a clause specifying whether, in the case of a dispute, the two parties will take the issue to an arbitrator. If arbitration isn’t the go-to option, then mediation is an alternative they may agree on. While both help the two parties settle their dispute outside of court, there are differences between the two, and so it is important to understand them before deciding which route to go in case of a disagreement. So will you mediate or arbitrate? Perhaps after reading, you’ll be able to make an educated decision.

Arbitration

The concept of a third-party arbitrator has been coming up in the news plenty in recent months due to the NFL’s headline-dominating Deflategate scandal, but arbitration processes are part of all sorts of agreements, including recording contracts. If an artist gets into a dispute with his or her label over the royalties for the musician’s latest album, and the contract calls for the dispute to go to arbitration in such cases, the conflict will go to a neutral third-party charged with making a decision. Whatever that ultimate determination is, it is typically legally binding.

Arbitration is often a better route than going to court because it is a faster process typically tailored to the specific clause in dispute. Additionally, when the two parties meet with an arbitrator their discussions are not required to be made public, which can prove beneficial to both sides.

Arbitration, however, still has its downsides. For example, typically there is a winner and a loser, just as there is when a disagreement is brought to court. One party will usually walk away from the discussions disappointed. Arbitration is also similar to going to court in that the talks usually move along in accordance with the law, due to the legally binding nature of the third-party arbitrator’s decision. There is less flexibility here than with mediation.

Mediation

Mediation may be desirable because, unlike arbitration, the process is more flexible and more prone to back-and-forth negotiation. It is more of a mutual discussion guided by a neutral third-party, than a presentation of evidence to an arbitrator. The less legally binding nature of mediation offers many more possibilities in terms of coming to an agreement. Since the two parties and the neutral mediator all have a hand in coming to an agreement, it can be crafted down to even the tiniest details. The unique proceedings of mediation also reduce the chance of damage to the relationship between the two parties, which can prevent further dispute down the road.

Due to the fact that all three parties are deeply involved in mediation, and the ultimate agreement can be much more detailed, this process is sometimes slower than arbitration. If both parties prefer a faster and more formal process, than mediation probably is not the way to go.

A recording contract may also call for both mediation and arbitration. In these cases, it would specify that if mediation does not result in an agreement that works for both parties, then the dispute should move to arbitration.

So will you mediate or arbitrate?

If you’re not sure whether to mediate or arbitrate when it comes to drafting a recording contract, contact an attorney who can help you further explore the advantages and disadvantages of each in your specific situation.

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Scarinci Hollenbeck, LLC, LLC

Related Posts

See all
Before You Buy: Managing Real Estate and Permitting Risk for BESS Projects in New York and New Jersey post image

Before You Buy: Managing Real Estate and Permitting Risk for BESS Projects in New York and New Jersey

For developers pursuing battery energy storage system (BESS) projects, finding the right property is only the beginning. BESS site selection is as much a legal and transactional exercise as a real estate decision, with risk analysis central to the project’s ultimate success. Key Takeaways The core questions for BESS site selection in New York and […]

Author: Nicholas Wall

Link to post with title - "Before You Buy: Managing Real Estate and Permitting Risk for BESS Projects in New York and New Jersey"
What Business Owners Get Wrong Before Meeting a Litigation Attorney post image

What Business Owners Get Wrong Before Meeting a Litigation Attorney

What should you expect when meeting a litigation attorney about a business dispute? You should expect to describe the dispute in your own words, hand over the most important documents, flag any deadlines or immediate threats, and leave with a clearer picture of the problem, what information is still needed, and the likely next steps. […]

Author: Michael Mietlicki

Link to post with title - "What Business Owners Get Wrong Before Meeting a Litigation Attorney"
Arbitration vs. Litigation vs. Mediation: What New Jersey Businesses Should Know Before Signing a Contract post image

Arbitration vs. Litigation vs. Mediation: What New Jersey Businesses Should Know Before Signing a Contract

Arbitration resolves disputes privately before an arbitrator whose decision is usually final, while litigation resolves them in court with full rights of appeal. Whether a business ends up in arbitration or litigation is often decided when it signs the contract, long before any dispute arises. Key Takeaways When facing a contract dispute, carefully consider your […]

Author: Graham Staton

Link to post with title - "Arbitration vs. Litigation vs. Mediation: What New Jersey Businesses Should Know Before Signing a Contract"
Can You Own Part of a New Jersey Business Without a Written Agreement? post image

Can You Own Part of a New Jersey Business Without a Written Agreement?

Can you own part of a business in New Jersey without a written agreement? Yes, it is possible. Under New Jersey’s Uniform Partnership Act, a partnership can arise when two or more people carry on a business as co-owners for profit, whether or not they ever intended to form one. Ownership doesn’t necessarily depend on […]

Author: Michael Mietlicki

Link to post with title - "Can You Own Part of a New Jersey Business Without a Written Agreement?"
Crisis-Proofing Your New Jersey Business: Building a Crisis Response Plan Before You Need One post image

Crisis-Proofing Your New Jersey Business: Building a Crisis Response Plan Before You Need One

For New Jersey businesses, crisis preparedness should be viewed as a legal and operational function, not simply an emergency-management exercise. A well-designed crisis response plan can help preserve evidence, protect confidential communications, meet reporting obligations, limit unnecessary exposure, and prevent an already difficult situation from becoming a larger legal problem. Key Takeaways A serious crisis […]

Author: Sean M. Pena

Link to post with title - "Crisis-Proofing Your New Jersey Business: Building a Crisis Response Plan Before You Need One"
Monmouth County's Next Development Wave: What Developers and Investors Need to Know post image

Monmouth County's Next Development Wave: What Developers and Investors Need to Know

Monmouth County is entering a significant new phase of development. For those looking to acquire property or undertake a new project, understanding the market opportunity is only the beginning. The more important question is whether a particular property can actually be developed as contemplated and what approvals, agreements, and other conditions will be required to […]

Author: Donald M. Pepe

Link to post with title - "Monmouth County's Next Development Wave: What Developers and Investors Need to Know"

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Sign up to get the latest from our attorneys!

Explore What Matters Most to You.

Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.

Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.

Let`s get in touch!

* The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form. By providing a telephone number and submitting this form you are consenting to be contacted by SMS text message. Message & data rates may apply. Message frequency may vary. You can reply STOP to opt-out of further messaging.
“If you would like to submit a file, please email it directly to info@sh-law.com.

Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!