Benefits of Mediation Become Apparent

When Compared to the Alternatives

Southland Regional Association of Realtors

The Southland Regional Association of Realtors offers a groundbreaking program designed to settle real estate-related disputes through the use of trained mediators.

The goal of the mediation program is to empower participants in a dispute. Mediation offers a fair, fast mechanism to control the outcome – hopefully, before emotions spiral out of control and push the issue into the time-consuming, costly court system where a judge or jury decides.

Understanding the various types of dispute resolution along with the advantages and limitations of each is imperative. Only then will a buyer or seller fully grasp just how much they can benefit by using the mediation alternative.

The following is intended as an overview of the most common types of dispute resolution, beginning with the techniques that allow the greatest self-determination.

• Negotiation – The best and most common way to resolve a dispute is for the parties to sit down and, one-on-one, state their positions until an agreement is reached. In other words, talk to each other. It allows the maximum amount of self-determination. Any other form of resolutions will mean giving some measure of control to a third party, which typically means each party will have to live with an often unpleasant concession.
• Mediation – Mediation is similar and the next best technique to one-on-one negotiation. The key difference is that the process is facilitated by a third party, called a mediator who assists the parties in reaching a resolution while retaining substantial self-determination. A skilled mediator will speed up the process, keep discussions focused on the key issues and coax parties to seek and accept a fair resolution. If the parties fail to come to an agreement, either may turn to other dispute resolution techniques.
• Non-Binding Arbitration – Non-binding arbitration also involves a third party, an arbitrator. In this forum, the parties present their positions to the arbitrator who then issues an advisory ruling as to how the dispute should be resolved. The ruling is not binding, but offers each party the chance to see how a third party is likely to rule – in other words, a reality check. The disputants retain ultimate control only in their ability to reject the advisory ruling. Many disputes filed in the court system are ordered to go to non-binding arbitration. While the decision is not binding, stiff penalties could be imposed if the party rejects the arbitrator’s decision only to wind up with a result through trial that is less favorable than what the arbitrator advised.
• Binding Arbitration – This is identical to non-binding arbitration with two very important distinctions – the arbitrator’s ruling is binding on the parties and it generally is not subject to appeal. Once submitted to binding arbitration, the parties lose control of the outcome.
• Court Trial or Bench Trial – A court trial, also known as a bench trial, is a trial in front of a judge without a jury. The parties present their case and the judge issues a ruling. This is similar to binding arbitration, although it tends to be a much more formal process. While the parties give up all meaningful control of the process and results, the decision may be appealed to a higher court.
• Jury Trial – A jury trial is before a panel of peers who maintain broad control over the ultimate resolution of the conflict. The process is limited by laws which are enforced by the judge. Here, too, the parties lose control of the outcome, although it also may be appealed.

Mediation and binding arbitration are the most common techniques used by real estate professionals. Experienced Realtors work hard to avoid problems, but when they arise mediation presents a quick, cost-effective alternative to litigation.

This column is a service of the 11,800-member Southland Regional Association of Realtors. Send questions to David R. Walker via e-mail to Davidr7944@aol.com.

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08/2002