Businesses sometimes integrate requirements for alternative dispute resolution into their contracts with workers, customers or clients. People have become more skeptical of arbitration clauses in recent years, as they may feel trapped and denied justice if they must forgo litigation to resolve matters privately outside of court.
Mediation has become a popular alternative to both litigation and arbitration. Those responding to a proposal for mediation and those considering making a suggestion to attend mediation may question what options they have if the mediation session isn’t successful or the outcome is unfavorable.
Is mediation generally a binding process?
Mediation itself is not binding
In many cases, those attending arbitration have to agree to a binding process. Both parties agree to defer to the decision made by the arbitrator, regardless of the outcome. They have no right to appeal or to initiate litigation after the arbitration process.
Mediation is different. It is only binding if the parties reach an agreement and sign a contract. A mediation session ends when the parties sign a document outlining the terms of the compromise that they reached.
Until they sign that agreement, either party can potentially walk away from the table and end the mediation efforts. After signing the agreement, however, both parties generally have to uphold the terms set during the mediation session.
Many workers and consumers find the mediation process less intimidating and imbalanced than mandatory arbitration. Contracts that require alternate dispute resolution or mediation may be less off-putting than requirements for binding arbitration.
Exploring different forms of alternative dispute resolution can be beneficial for companies that want to avoid litigation without damaging their reputations or working relationships.