Mediation and arbitration are two words that get thrown around frequently during a New Jersey divorce. They're also very different.
Both can provide alternatives to having a Family Court judge decide disputed issues at trial. But the role of the neutral person, and who ultimately makes the decisions, is fundamentally different.
Here's the easiest way to remember it: A mediator helps you make the decisions. An arbitrator makes decisions for you. That's an important distinction.
Mediation is a negotiation process involving a neutral third party called a mediator. The mediator doesn't represent you or your spouse. The mediator's job is to help both of you identify the issues, exchange the information necessary to evaluate them, communicate more productively, and explore possible compromises.
The mediator does not decide who wins.
Suppose you and your spouse disagree about alimony, what should happen to the marital home, and how your retirement assets should be divided. The mediator can help you work through those disagreements and explore different ways of resolving them.
But the mediator can't simply announce, "Here's what we're doing." You and your spouse still decide whether to accept a proposed resolution. That's one of the biggest advantages of mediation. You retain control over the outcome.
Arbitration is much closer to having a private decision-maker.
You and your spouse agree to submit specified disputed issues to an independent arbitrator. You also agree upon who that arbitrator will be.
The arbitrator hears the parties' positions and considers the evidence before making a decision on the issues submitted to arbitration.
That's fundamentally different from mediation.
If you're mediating and you don't like a proposed settlement, you generally don't have to agree to it.
In arbitration, you're authorizing another person to actually decide the issues you've agreed to arbitrate.
New Jersey's current arbitration agreement expressly requires parties to acknowledge that they're giving up their right to have the court decide the disputes being submitted to arbitration and that there are limited circumstances in which an arbitration award can be challenged. That's something you need to understand before agreeing to arbitrate.
Mediation can make sense when both spouses believe there is a realistic possibility of reaching an agreement but need help getting there.
Maybe you're relatively close on the numbers but can't close the gap. Maybe communication between you has deteriorated. Maybe you need a neutral person to help everyone look at the dispute differently.
Mediation can also give the parties more flexibility to develop solutions that work for their particular family rather than simply asking a judge to choose between two competing positions.
Most importantly, you're still negotiating. Nobody is imposing the settlement upon you.
Arbitration becomes a different conversation because you're asking someone to make a decision. There can be practical reasons for doing that.
The parties have input into selecting the arbitrator. They can define which issues will be arbitrated. Scheduling may also provide greater flexibility than waiting for available trial dates in the court system.
But arbitration isn't simply "mediation where somebody eventually picks a side." You're voluntarily giving an arbitrator decision-making authority over the issues you've agreed to submit. That makes the decision to arbitrate considerably more significant.
Think about the three processes this way.
In mediation, you and your spouse ultimately decide whether there is a settlement.
In arbitration, an arbitrator decides the issues you've agreed to submit to arbitration.
In a court trial, a Family Court judge hears the evidence and decides the disputed issues presented to the court.
Only a judge can actually grant the divorce itself, even when mediation or arbitration is used to resolve the underlying disputes. The right choice depends upon the case.
Divorce doesn't always fit neatly into one box. You may be able to negotiate some issues directly and mediate others. You might resolve most of your case through settlement but still have one particularly difficult issue that needs another form of dispute resolution.
That's why the question shouldn't simply be, "Is mediation better than arbitration?" The better question is: What are we trying to resolve, and which process makes the most sense for resolving it?
Before agreeing to mediation or arbitration, understand the difference between them. If you're mediating, understand what role the mediator will play, what information needs to be exchanged, and how you'll obtain legal advice during the process.
If you're considering arbitration, understand exactly which issues you're agreeing to arbitrate, what authority you're giving the arbitrator, and the limitations that may apply if you later disagree with the decision.
Alternative dispute resolution can be extremely useful in a New Jersey divorce. But "alternative" doesn't mean informal or unimportant. These processes can determine how some of the most significant financial and family issues in your life are resolved. Make sure you understand the process before deciding which one is right for your case.
If you're considering divorce in New Jersey and want to understand mediation, settlement, arbitration, and the other ways your case may be resolved, my free Divorce Smarter Course explains the process in straightforward terms.
Until next time,
Steve