New Bern and Morehead City Litigation Lawyer Wes Collins Explains Mediation and Arbitration
Mediation and Arbitration
After the discovery process has been conducted and evidence compiled, it is time to think about proceeding to trial or possible settlement of the case. The Supreme Court of North Carolina maintains a set of rules which require litigants to go through some form of pre-trial settlement procedure. The two most common mechanisms are Mediation and Arbitration.
Mediation. Mediation is a chance for the parties to a civil lawsuit to come together in an attempt to resolve the issues of the case without going to trial. In North Carolina, all civil litigants must submit to Court-ordered mediation. The parties will receive an Order from the Court directing them to designate a Mediator and select a place, date, and time for a “Mediated Settlement Conference.” This usually occurs soon after the Defendant files its Answer or other responsive pleading with the Court.
The parties have a ninety (90) day window in which to schedule and complete the Mediated Settlement Conference. The parties, through their attorneys, communicate with each other as to who will be selected to conduct the mediation, and when and where it will occur. In the rare instance when the details cannot be worked out between the parties, the Court will designate a mediator and set the details for the parties. Typically, the Mediated Settlement Conference is held at the offices of the attorney for one of the parties, but it does not have to be. In cases where the Plaintiff and Defendant live far apart geographically, the parties will meet at a neutral site.
Mediators are lawyers who have undergone certain training and received certification to conduct Mediated Settlement Conferences. Each local Court maintains a list of individuals who are qualified to perform this duty. Mediators are often retired judges, but this is not always so. The role of the Mediator is much like that of a judge in that he listens to both parties regarding the merits of their respective cases. However, the Mediator does not sit in judgment. Rather, the Mediator acts as a facilitator, working with both parties to reach a settlement.
When Mediation begins, both parties are together in the same room with the Mediator and the attorneys. Each side has an opportunity to present a brief summary of the facts, highlighting issues and facts which they feel strengthen their case. After that, the parties go into separate rooms. The Mediator works as a go-between, communicating offers of settlement and counter-offers between the Plaintiffs and the Defendants. A Mediator often takes time with the parties to point out the flaws in their case. This is particularly helpful in cases where the Plaintiff and Defendant are unwilling to compromise, since assisting the parties to understand the problems in their cases tends to help move them away from their positions and towards settlement.
The Mediated Settlement Conference will continue so long as the parties are still willing to continue to work towards settlement. In some cases, a settlement is reached and the case is resolved. This occurs when an offer is made by one party, the offer is accepted by the other, and a report of settlement is filed with the Court. However, if it appears that the litigants cannot come to a compromise, the parties are at what is referred to as “impasse.”
Arbitration. The second common mechanism utilized for settlement of litigation is Arbitration. Arbitration differs from Mediation in that Arbitration is slightly more formal. Arbitration can be binding or non-binding. In binding Arbitration, the decision of the Arbitrator is final. In non-binding Arbitration, either party may appeal from the Arbitrator’s decision by requesting a trial de novo, meaning that the decision is disregarded and a trial is held.
Court-Ordered Arbitration is only appropriate in select cases. The Court may order the parties to arbitrate in cases in District Court, meaning those where less than $10,000.00 is at stake, and in those Superior Court cases where the amount in controversy is less than $15,000.00. Arbitration may also be conducted where the parties agree in writing to submit to the procedure. The procedure is not appropriate in cases where the litigation involves complex legal or technical issues.
The process of Arbitration is much more similar to a civil trial in that it involves presenting evidence to a third party who makes a decision as to the outcome of the case. This person (the Arbitrator) is a lawyer and may be a judge. As with Mediators, the Court will have a list of qualified Arbitrators from which to choose. Although this procedure resembles a civil trial in many respects, the rules of evidence and procedure do not strictly apply as they normally would. The Arbitrator receives a brief list of issues and contentions submitted by the parties, as well as evidence in the form of witness testimony, documents, exhibits, and sworn or unsworn statements.
The Arbitration hearing usually lasts no more than an hour and is conducted in a courtroom or public meeting room. As with Mediation, the parties must attend or face sanctions from the Court. After the hearing is concluded, the Arbitrator will announce her decision as to the issues in the case (called the Award). The Award may include the amount of monetary compensation claimed, together with interest, and costs associated with arbitration, and attorney fees, if allowed.
If one of the parties is dissatisfied with the Award, he may file a written request for Trial de Novo with the Court within thirty (30) days of the Award. In the event that this does not occur, the Award becomes a final judgment in the case.