Conflicts of interest are likely to occur in any type of relationship., whether between different people or between companies. The traditional and most common option by which disputes are resolved is through the courts, whose judges issue resolutions based on the law that the affected parties must accept.
However, There are other intermediate alternatives such as arbitration and mediation, in which the parties turn to an impartial third party who will facilitate consensus and agreement between them.
In the following content we discuss the differences and advantages that exist between these two alternatives.
Differences between arbitration and mediation
At first glance they may seem the same, but they are not. In both procedures, it is an independent third person who directs the process, but the following differences can be found:
- Designation of the third party: In arbitration, the figure that performs the functions is the arbitrator, chosen by the parties. On the other hand, in mediation it is an independent professional (the mediator) who makes the arrangements, and is not chosen by any of the parties or companies confronted.
- Dispute resolution: The arbitrator proposes resolutions, which must be accepted by the parties, regardless of whether they agree or not. On the other hand, the mediator, after actively listening to the parties' arguments, can propose certain possible solutions in specific cases, but they will never be binding and the agreement can only be signed if both parties agree.
- Process development: Since the arbitrator is the one who will ultimately make the decision on resolving the conflict, the parties tend to focus more on convincing the arbitrator of their proposals. However, because the mediator only encourages communication (and even if he proposes options, they are not mandatory), the parties focus on dialogue and exchanging their own interests to try to reach some common point.
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Advantages of arbitration and mediation
Several points can be highlighted:
- Ordinary judicial processes last longer and are more economically costly, unlike mediation and arbitration, which are characterized by shorter execution times and being cheaper (and whose agreements have the same legal validity). than a judge's sentence).
- Everything that is discussed and happens during the entire arbitration or mediation process, from the first information session to the last session where the agreement is signed, is absolutely confidential.
- Flexibility. Judicial resolutions issued by a judge are immovable. However, in mediation or arbitration, proposals to resolve a specific conflict can be debated based on the desire to reach an agreement that satisfies both parties to the extent possible.
- Both procedures avoid the total breakdown of relationships. Contrary to what happens in litigation that goes through the courts, which tend to deteriorate and undermine relationships, through mediation and arbitration the parties have the opportunity to dialogue, express themselves and be heard, so relationships are strengthened. They damage less and can even be maintained for the future.
In EIM you can find all the information you need to take your mediation course.
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