If you would like to resolve a legal dispute, there are several options, including litigation in the court system (filing a lawsuit), arbitration, and mediation. Often, more than one dispute resolution option is available to those who wish to solve a legal problem. The best option can be selected after considering a variety of factors, including the amount of the dispute or damages, the cost of resolving the dispute, the time to resolution, etc.
Litigation is the process through which two parties settle legal disputes through the public court system. A lawsuit begins when a complaint is filed in a court. Parties to the dispute present evidence to a judge or jury, who ultimately render a binding decision. Formal rules of procedure established by federal, state, or local courts govern every aspect of litigation, and courtroom formalities must be followed.
Parties to a lawsuit determine whether they want legal representation, however filing or defending a lawsuit in court without a lawyer can be daunting for many individual consumers.
Arbitration is a less formal way for parties to resolve legal disputes outside of the court system. Rather than going to court, in arbitration both parties present evidence to an arbitrator who follows the provisions of the arbitration agreement and the rules of the administrator when making a decision. Arbitration decisions are generally binding, and must be confirmed by a court to be legally enforceable.
Arbitrations are administered in the United States by many arbitration administrators. Some specialize in particular industries or areas of law. The three largest arbitration administrators in the U.S. are the American Arbitration Association, the National Arbitration Forum, and JAMS.
Parties in arbitration have the right to legal representation, however individual consumers may be more comfortable filing or defending a claim on their own in arbitration than in court.
Mediation provides parties with an opportunity to work with a neutral mediator to settle disputes outside of court in a hands-on way. Mediators facilitate settlement of a dispute by negotiating with the parties, supervising the exchange of information and the bargaining process, and arriving at a compromise.
Mediation is almost always voluntary, though in some instances participation can be court-mandated. Small claims, housing disputes, family law matters, and many other types of disputes are commonly settled through mediation. Whereas a judge generally controls the litigation process, the parties themselves generally control the mediation process, deciding the location and time of the mediation, the “rules” of interaction of the mediator, how the parties will divide costs for mediation, etc.