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
Corporate Consolidation and Antitrust Issues in Mergers post image

Corporate Consolidation and Antitrust Issues in Mergers

Corporate consolidation involves two or more businesses merging to become a single larger entity. The result is often a stronger and more competitive company that can better navigate today’s competitive marketplace. What Is Corporate Consolidation? Corporate consolidation closely resembles a basic merger transaction. The primary difference is that a consolidation creates an entirely new business […]

Author: Dan Brecher

Link to post with title - "Corporate Consolidation and Antitrust Issues in Mergers"
What is Business Law and Why Is it Important? post image

What is Business Law and Why Is it Important?

Business law plays a critical role in nearly every aspect of running a successful enterprise, from negotiating a commercial lease to drafting employee policies to fulfilling corporate disclosure obligations. Understanding what is business law and your legal obligations can help your business run smoothly and build productive relationships with clients, business partners, regulators, and others. […]

Author: Dan Brecher

Link to post with title - "What is Business Law and Why Is it Important?"
Corporate Transactions: Best Practices for Successful Deals post image

Corporate Transactions: Best Practices for Successful Deals

Corporate transactions can have significant implications for a corporation and its stakeholders. For deals to be successful, companies must act strategically to maximize value and minimize risk. It is also important to fully understand the legal and financial ramifications of corporate transactions, both in the near and long term. Understanding Corporate Transactions The term “corporate […]

Author: Dan Brecher

Link to post with title - "Corporate Transactions: Best Practices for Successful Deals"
How to Conduct a Fair and Legal Employee Termination in 2025 post image

How to Conduct a Fair and Legal Employee Termination in 2025

Ongoing economic uncertainty is forcing many companies to make tough decisions, which includes lowering staff levels. The legal landscape on both the state and federal level also continues to evolve, especially with significant changes to the priorities of the Equal Employment Opportunity Commission (“EEOC”) under the Trump Administration. Terminating an employee is one of the […]

Author: Angela A. Turiano

Link to post with title - "How to Conduct a Fair and Legal Employee Termination in 2025"
Admin Dissolution for Annual Report: What You Need to Know post image

Admin Dissolution for Annual Report: What You Need to Know

While filing annual reports may seem like a nuisance, failing to do so can have significant ramifications. These include fines, reputational harm, and interruption of your business operations. In basic terms, “admin dissolution for annual report” means that a company is dissolved by the government. This happens because it failed to submit its annual report […]

Author: Dan Brecher

Link to post with title - "Admin Dissolution for Annual Report: What You Need to Know"
What Is Antitrust Litigation Law? post image

What Is Antitrust Litigation Law?

Antitrust laws are designed to ensure that businesses compete fairly. There are three federal antitrust laws that businesses must navigate. These include the Sherman Act, the Federal Trade Commission Act, and the Clayton Act. States also have their own antitrust regimes. These may vary from federal regulations. Understanding antitrust litigation helps businesses navigate these complex […]

Author: Robert E. Levy

Link to post with title - "What Is Antitrust Litigation Law?"

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.

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