Scarinci Hollenbeck, LLC
The Firm
201-896-4100 info@sh-law.comFirm Insights
Author: Scarinci Hollenbeck, LLC
Date: September 17, 2015
The Firm
201-896-4100 info@sh-law.comRecording 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.
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 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.

Every New Jersey company should periodically evaluate its governance framework. Strong corporate governance protects directors and officers, builds investor confidence, reduces litigation exposure, and positions a company for sustainable growth. The first quarter of the year is a great time to evaluate your corporate governance practices and perform any routine maintenance needed to keep that […]
Author: Ken Hollenbeck

Being served with a lawsuit is one of the most stressful legal events a business or individual can face. Whether the claim involves a contract dispute, an employment matter, an intellectual property issue, or another legal challenge, the actions you take in the first few days can significantly shape the outcome of your case. Acting […]
Author: Robert E. Levy

Special Purpose Acquisition Companies (SPACs) continue to gain momentum as we move through 2026. After enduring a significant contraction following the 2021 boom and the regulatory scrutiny that followed, SPAC activity rebounded sharply in 2025 and now carries forward into 2026 with real momentum. The SPAC resurgence reflects broader improvements in both market conditions and the […]
Author: Dan Brecher

Compliance programs are no longer judged by how they look on paper, but by how they function in the real world. Compliance monitoring is the ongoing process of reviewing, testing, and evaluating whether policies, procedures, and controls are being followed—and whether they are actually working. What Is Compliance Monitoring? In today’s heightened regulatory environment, compliance […]
Author: Dan Brecher

New Jersey personal guaranty liability is a critical issue for business owners who regularly sign contracts on behalf of their companies. A recent New Jersey Supreme Court decision provides valuable guidance on when a business owner can be held personally responsible for a company’s debt. Under the Court’s decision in Extech Building Materials, Inc. v. […]
Author: Charles H. Friedrich

Commercial real estate trends in 2026 are being shaped by shifting economic conditions, technological innovation, and evolving tenant demands. As the market adjusts to changing interest rates, capital flows, and workplace models, investors, owners, tenants, and developers must understand how these trends are influencing opportunities and risk in the year ahead. Overall Outlook for Commercial […]
Author: Michael J. Willner
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
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!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!