Arbitration and Mediation

Alternative dispute resolution (ADR) has come to play an increasing role in the resolution of workers' compensation disputes. Almost half the states now offer arbitration and/or mediation as viable ADR methods.

Arbitration is a fairly formal process in which the opposing sides present their argument to a neutral third party (arbitrator). Generally, the arbitrator is chosen by the parties. Once the arbitrator hears all the evidence, he will make a determination as to the outcome of the dispute. Depending upon the parties' agreement and the jurisdiction in which the dispute is heard, the arbitrator's determination can either be binding or merely a recommendation as to how the matter should be resolved. Further, some states actually require the parties to go through the arbitration process, while others consider it a voluntary exercise.

Mediation is similar to arbitration in that the services of a neutral third party are utilized. However, compared to its ADR counterpart, mediation is a much more informal method. The mediator does not "decide" the case or render a judgment as to who should prevail in the dispute. Rather, he merely serves to aid the parties in reaching a mutually satisfactory conclusion to their dispute. The goal of the mediator is to provide a forum for each party to hear the other's side and, having done so, reach a settlement. Those states offering mediation as an ADR method generally provide the parties with guidelines to maximize the process and promote fairness. These guidelines may include time parameters for the process, an abbreviated process for smaller claims, and a provision for the imposition of an advisory opinion explaining the perceived rights and obligations of the parties.