1. MEDIATION
Mediation is a consensual, confidential and relatively informal negotiation process in which parties to a dispute use the services of a skilled and independent mediator to assist them to define the issues in dispute, to develop and explore settlement options, to assess the implications of settlement options and to negotiate a mutually acceptable settlement of that dispute which meets their interests and needs.The objective of mediation is to enable and empower the parties to negotiate and resolve the dispute promptly, cost effectively and confidentially rather than to have a decision imposed upon them by a judge, arbitrator or adjudicator. The process enables the parties to negotiate flexible and creative solutions which need not conform to strict legal rights or general community standards.
2. ARBITRATION
Arbitration employs a neutral third party to hear the evidence and decide for the disputants how their conflict should be resolved. Arbitration tends to be more structured and formal than mediation. Unlike mediation, arbitration will bring finality to the dispute whether the parties agree or not; an arbitrator’s decision is, and is meant to be, final and binding on the parties to the dispute. Indeed, the decision of the arbitrator may not accord with the resolution suggested by either party, but it will nevertheless be final. Arbitration offers the following advantages:
- Compared to mediation, arbitration provides the certainty of a resolution, even if parties to the disputes no longer talk to each other;
- Compared to a court battle, arbitration is less costly and much quicker.
The most important disadvantage of arbitration is that the decision will be in favor of a party and leave the other party deeply unsatisfied. As a result, the arbitration process may not lead to parties preserving their relationships. Quite evidently, it is not an ideal situation when disputes arise within a group of people that will undoubtedly have to work together again, as is the case in most sports-related disputes.
On the Model Policies & Agreements page, you will find a template of a contractual arbitration clause for insertion into contracts, agreements or policies, as well as two versions of an arbitration agreement template. An arbitration agreement is necessary in the following cases:
- When the contract subject to the dispute does not provide for med/arb clause (standard agreement);
- When the parties wish to settle their dispute by way of med/arb and no med/arb clause providing for such a proceeding exists (standard agreement);
- When the parties wish to bypass the internal appeal process of a sport organization (agreement with waiver).
3. EXPERT DETERMINATION
Expert Determination is a simple means of binding dispute resolution. Unlike arbitration, Expert Determination is not governed by legislation. Expert Determination is a consensual process by which parties to a contract agree to refer matters in dispute to an independent person to decide.
The principle attraction of Expert Determination is that it can provide a binding determination without involving many of the formalities that can beset arbitration and litigation. It also has the advantage of assisting in preserving business relationships where strictly adversarial proceedings may not.
The process is controlled by the parties themselves, who agree beforehand whether or not they will be bound by the decisions of the expert, who is an independent person with expertise relevant to the matters in dispute between the parties.
Expert Determination has become a popular method of resolving disputes in a number of industries involving qualitative or quantitative issues, or issues that are of a specific technical nature or specialised kind, because it is generally quick, inexpensive, informal and confidential.
4. FINAL OFFER ARBITRATION (“FOA”)
The method called “Final Offer Arbitration” (“FOA”), sometimes also referred to as pendulum or baseball arbitration is a developing area for dispute resolution. FOA is a model of arbitration that originated in the late 1940s and consolidated in the 1970s in the USA to resolve labour disputes in the public sector and the baseball league, hence the name. FOA differentiates itself from conventional arbitration owing to the incentives it sparks in parties’ conduct to reach a mutually agreeable settlement, its celerity in issuing an award and, accordingly, its overall ability of keeping proceedings costs in check.
FOA PROCEEDINGS
In a proceeding of FOA, the tribunal is obliged to render an award by selecting in its entirety one of the parties’ final proposals on the contentious issue or issues. Arbitrators cannot seek to bridge the gap between parties’ positions by coming up with a compromise decision as it is the final offer of one of the parties that will be chosen inevitably over the other, which also raises the fear in the parties of losing the entire case. Hence, the parties are spurred to make more realistic proposals, since an unreasonable position will most likely be rejected by the tribunal in favour of the more sensible competing offer made by the other party.
The procedure is quite straightforward, although there exist several variations. After the round of written pleadings and the hearing where the contradictory points are singled out and evidence is presented to sort out those very points, each party simultaneously submits its proposal of the draft award in a sealed envelope. The proposals submitted by the parties are kept confidential for the entirety of the proceedings to the opposite parties and the arbitrators as well. It is only after the final decision of the Tribunal that such proposals are opened by the Tribunal, whereby the proposal closest to the decision of the Tribunal is chosen and subsequently passed by the Tribunal in the form of the award of the said case.
The foregoing is the “package FOA”, according to which parties deliver an offer addressing the dispute as a whole, and the tribunal picks one complete package or the other. A less stringent version is the “issue-by-issue FOA” version, where each party submit its final offer on each separate question in dispute, and then the tribunal can mold the award by siding with one party’s offer on some points and with the other party’s offer on others, thus combing the two drafts. This issue-by-issue FOA obviously shares more similarities with conventional arbitration. Another variety allows each party to put forward a twofold offer so that it gives parties some leeway in presenting at least a more ambitious position together with a more moderate stance to choose from. Some other modalities also envisage its inclusion in a multi-tier process, where mediation precedes the resort to the FOA. Some forms of FOA expressly provides for tribunal’s obligation to give reasons for its choice, while others do not require arbitrators to state any reason.