Who pays the mediator’s or arbitrator’s fees?
In the case of a mediation, the mediator’s fee is split equally between the parties.
In the case of an arbitration, the usual practice is for each party to pay the fees of its chosen arbitrator
and for both parties to then split the umpire's fee. If there is only one arbitrator, then, as in mediation,
the parties split the arbitrator’s fee equally.
In addition, the parties share equally in the costs of any rented space and other expenses in common
associated with conducting a mediation or arbitration.
How are such costs calculated?
Mediators and arbitrators are paid by the hour. If a flight or hotel stay is required, they are also
reimbursed for their time and travel expenses actually incurred. Any charges for the use of meeting
facilities are billed at cost.
Why choose one method over the other?
Sometimes parties have no choice: a court orders them to mediate. Otherwise, if one or the other
method is not required by the contract, the parties have a choice to make. Many factors can influence
each of the parties in making that choice. Normally, Mr. Cashion suggests that the parties first
consider mediation, as that is a voluntary attempt to resolve the dispute before more formal
proceedings take place. Mediation has been shown to be successful approximately 85% of the time.
Since mediation is relatively inexpensive and could probably result in an agreement in a relatively short
amount of time, it is his view that this is almost always worth a try. There is little to be lost and much to
be gained by mediation.
Are mediation and arbitration usually less expensive than litigation?
Yes. This is due to the relative informality of these proceedings as compared to litigation. Litigation
can involve the filing of many motions, delays, exhaustingly extensive discovery, depositions, waiting for
calendars to clear and the case to be listed on the court’s docket for trial, and on and on. Then there is
the probability of an appeal by the losing party. It is not unusual for a lawsuit to take up to five or six
years before it is finished. In mediation, within a day or perhaps two, the parties and the mediator can
get a pretty good idea of whether there is hope for settlement. Arbitration takes longer. It is more like a
mini-trial, but with more relaxed rules of evidence and procedure. While more case preparation than in
mediation is required of all involved (the parties have to agree on an arbitrator or arbitrators, attorneys
have to take discovery, do research, prepare their briefs, the arbitrator(s) need to read them and the
hearing needs to take place), arbitral decisions are usually reached in considerably less time than in a
court of law. Mr. Cashion has seen complicated cases decided after a week-long hearing, often less.
It is difficult to predict just how long an arbitration will last, but it is generally safe to say that it will be
considerably less than litigation.
If I am unhappy with the outcome of an arbitration, is it possible to appeal that
decision?
If the arbitration satisfies certain conditions, the likelihood of a successful appeal is small. Statutes
and cases are very supportive of arbitration as an alternative dispute resolution method. The grounds
for appealing an arbitral decision are limited to (1) the decision being procured by corruption, fraud or
undue means; (2) evident partiality or corruption in the arbitrators; (3) arbitrator misconduct in refusing
to postpone the hearing where there was sufficient cause for postponement, refusal to hear evidence
pertinent and material to the dispute, or any other misbehavior that prejudiced any of the parties’ rights;
and (4) the arbitrators exceeding their powers or executing them so imperfectly that a final and definite
decision was not made (sometimes referred to as "manifest disregard of the law"). However, it must
be said that, because these bases are subject to legal interpretation, it is not possible to predict how a
court will react when presented with a specific case.
Marvin J. Cashion, Principal
Attorney-at-Law
Cashion Mediation & Arbitation, LLC
214 Serenity Hill Circle
Chapel Hill, NC 27516
Tel. (919) 240-4221
Cell (786) 514-5224
mcashion@cashionADR.com
Frequently Asked Questions
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Cashion Mediation & Arbitration, LLC
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