Mediation and Arbitration

The conflict we face in this world is constant.  Conflict is a natural part of life, through which we must learn to navigate.  There are varieties of tools available to facilitate conflict resolution on a day-to-day basis.  Communication, the S-TLC system, negotiation, managing stress and anger, and forgiveness all can help to resolve conflict.  However, sometimes this is not enough.  Mediation and arbitration may be necessary to resolve conflict in some situations. 

Mediation takes place when "a neutral third party facilitates communication between the conflicting parties so that they may work out their own mutually acceptable agreement" (Abigail & Cahn, 2011, p. 195).  Sometimes disputes become so emotional that individuals lose the ability to communicate effectively with one another.  They have lost site of that necessary step in conflict resolution and can only see their personal agenda.  "A dispute is defined as a conflict that has reached a point where the parties are unable to resolve the issue by themselves due to a breakdown in communication, and normal relations are unlikely until the dispute is resolved"  (Abigail & Cahn, 2011, p. 195). 

When communication levels have deteriorated to that point, it is necessary to use a neutral third party to help resolve the conflict and help to reopen the lines of communication.  This is often used in situations regarding family law and relationships.  More often than not, mediation is used during child custody and support litigation.  Mediation also plays a large part in divorce, seperation, and marriage counceling.  "Mediation is an informal and confidential way for people to resolve disputes with the help of a neutral mediator who is trained to help people discuss their differences. The mediator does not decide who is right or wrong or issue a decision. Instead, the mediator helps the parties work out their own solutions to problems"  (USA.gov).

During mediation, a mediator (or "neutral third party who has no decision-making power regarding the outcome of the mediation") works to "facilitate communication by encouraging cooperation and discouraging competition between parties"  (Abigail & Cahn, 2011, p. 198).  The mediator helps individual parties describe the dispute, allows each the opportunity to voice their concerns, helps the parties to find common ground and the hopefully come to a final agreement.  Again, often this works well during family law cases where emotions run high and individuals have lost the ability to communicate and settle their disputes on their own. 

Mediation is a strong tool.  However, sometimes a situation calls for a little something more.  Arbitration is when "a neutral third party considers both sides of a dispute and makes a decision, which is more binding than that of a judge in the legal system if both parties have agreed in advance to abide by the decision"  (Abigail & Cahn, 2011, p. 195).  Arbitration also works well in the legal system in the case of family law.  When parties have already gone through mediation and still cannot come to an agreement, arbitration offers an alternative to going before a judge.  Arbitration is also used in the housing industry.  During the closing of a home loan, most mortgage  companies include a document amongst the papers that states that the borrowers agree to arbitrations if they are ever to default on the loan.  This document allows the mortgage company to circumvent the court system to aquire an eviction notice and reclaim the house.  Since it is signed at the closing table by the home owners as part of the loan papers, the individuals have already previously agreed to abide by the decision of the arbitors. 

The American Arbitration Association (AAA) is an organization that allows both individuals and other organizations an alternative to resolving conflicts and disputes in court.  The AAA assists "in the appointment of mediators and arbitrators, setting hearings, and providing users with information on dispute resolution options, including settlement through mediation. Ultimately, the AAA aims to move cases through arbitration or mediation in a fair and impartial manner until completion" (Association, 2007).   The AAA covers a vast area of careers and dispute cases.  The AAA covers commercial, construction, consumer, employment, government, labor and international disputes. 

After having worked as a mortgage processor for over six years, I have witnessed arbitration used multiple times.  In this particular industry, there are two situations where I have seen it used most often.  The first is in the situations stated above.  The majority of mortgage lenders require an arbitration agreement signed at closing.  This alleviates the mortgage company from having to spend extra time and money in reclaiming the home if the borrowers are unable to pay back the loan.  In this situation, utilization of the AAA can help resolve this dispute.  Since the borrowers have already signed the document at closing the mortgage company simply needs to send a copy to the AAA showing that they have agreed to decision. 

The second example came to my attention more recently.  After having worked for several years as a mortgage processor, I became a registered appraiser.  As a real estate appraiser, I worked with my husband who was a licensed appraiser.  He mentored and taught other new appraisers the trade and helped them to build their own business.  A few of the appraisers he mentored decided to go off on their own.  They concluded that they would be much more profitable in the appraisal industry if they ignored some of the laws.  My husband tried to warn them.  In the end, however, they decided not to listen.  As of a few weeks ago, my husband received a subpoena to testify in court against them.  I spoke in some detail with my husband and the investigator on the case.  Apparently, these individuals received an offer for mediation and were unable to come to any type of agreement.  Later, the prosecutor offered them a chance to settle through arbitration.  They refused. Now their fate hangs in the justice system.

Conflicts are unavoidable.  They are bound to happen.  When standard day-to-day tactics are not enough and conflicts are elevated into disputes, other tactics must come into play.  Mediation and arbitration may be necessary to resolve conflict in some situations. 

References

Abigail, R. A., & Cahn, D. D. (2011). Managing Conflict Through Communication. Boston: Allyn & Bacon.

Association, A. A. (2007). About Us. Retrieved June 20, 2011, from American Arbitration Association: http://www.adr.org/about

USA.gov. (n.d.). Mediation. Retrieved June 20, 2011, from U.S. Equal Employment Opportunity Commision: http://www.eeoc.gov/employees/mediation.cfm