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
When a Child Turns 18: The Gap in Your Family’s Estate Plan post image

When a Child Turns 18: The Gap in Your Family’s Estate Plan

Once a child turns 18, parents lose the automatic legal authority to make medical and financial decisions on their behalf, even if the child still lives at home or remains on the family’s insurance. Three documents close that gap: a durable power of attorney, a health care proxy or directive, and a HIPAA authorization. For […]

Author: George McGowan

Link to post with title - "When a Child Turns 18: The Gap in Your Family’s Estate Plan"
Business Mediation: An Overview and Practical Tips post image

Business Mediation: An Overview and Practical Tips

Business mediation is a confidential, voluntary process in which a neutral third party helps companies negotiate a resolution to a commercial dispute without going to trial. Because working with a mediator is very different from litigating in the courtroom, it is important to understand how commercial mediation works, when it makes sense for your dispute, […]

Author: Paul Grossman

Link to post with title - "Business Mediation: An Overview and Practical Tips"
Top 5 Causes Leading to Construction Defect Litigation post image

Top 5 Causes Leading to Construction Defect Litigation

The five most common causes of construction defect litigation are design defects, substandard materials, workmanship defects, code violations, and subsurface defects. Because these flaws can compromise a building’s integrity, functionality, or safety, they frequently lead to disputes involving multiple parties and high financial stakes. Key takeaways: What is Construction Defect Litigation? Construction litigation is complex, […]

Author: Paul Grossman

Link to post with title - "Top 5 Causes Leading to Construction Defect Litigation"
How to Protect Your New Jersey Business When Going through a Divorce post image

How to Protect Your New Jersey Business When Going through a Divorce

The most effective ways to protect your business in a divorce are put in place before one begins: a prenuptial or postnuptial agreement, clean separation of business and personal finances, and divorce contingencies built into your operating or buy-sell agreements. If divorce is already underway, the priorities shift to establishing how the business is classified […]

Author: Jay McDaniel

Link to post with title - "How to Protect Your New Jersey Business When Going through a Divorce"
10 Common Issues in Franchise Disputes post image

10 Common Issues in Franchise Disputes

The most common franchise disputes involve breach of contract, franchise termination and non-renewal, intellectual property rights, territorial encroachment, royalty and fee payments, franchisor support obligations, and violations of state franchise laws such as the New Jersey Franchise Practices Act. Franchisors and franchisees can often resolve these conflicts by providing written notice detailing the dispute and […]

Author: Paul Grossman

Link to post with title - "10 Common Issues in Franchise Disputes"
Reputational Risk and Legal Exposure: Why New Jersey Businesses Must Manage Them Together post image

Reputational Risk and Legal Exposure: Why New Jersey Businesses Must Manage Them Together

New Jersey businesses must manage legal and reputational risk together because modern disputes play out on two fronts at once: the legal proceeding itself and the court of public opinion, where customers, employees, investors, and business partners often reach conclusions long before a judge or jury has had the opportunity to evaluate the facts. Success […]

Author: Sean M. Pena

Link to post with title - "Reputational Risk and Legal Exposure: Why New Jersey Businesses Must Manage Them Together"

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!