Arbitration and mediation are the two main ways business disputes are resolved outside a courtroom. In arbitration, a private arbitrator hears the evidence and issues a binding award that courts enforce with very few exceptions. In mediation, a neutral mediator helps the parties negotiate but can't impose a decision, and nothing is binding until the parties sign a settlement.
Many commercial contracts require arbitration, and Texas courts frequently send lawsuits to mediation before trial. We represent businesses in both, and our business litigation team takes the case to court when it belongs there.
Moving to compel arbitration, or opposing an overreaching motion to compel.
Presenting claims and defenses before arbitrators under AAA, JAMS and other rules.
Asking a court to confirm an award as a judgment, or to vacate or correct it in time.
Preparing for and attending mediation, and drafting the settlement agreement.
Arbitration clauses are enforced under the Texas Arbitration Act and the Federal Arbitration Act, which covers contracts involving interstate commerce. When a party sues despite a valid clause, the other side can ask the court to compel arbitration and stay the lawsuit, and an order refusing to compel can generally be appealed right away.
The fights are usually over whether a valid agreement exists, whether it covers the claims and whether a non-signer is bound. Clauses that adopt AAA or similar rules generally let the arbitrator decide whether a dispute falls within the clause, and a party that litigates too long before demanding arbitration can waive it. Construction contracts often require arbitration; see construction disputes.
A court must confirm an award unless there are grounds to vacate, modify or correct it, and an arbitrator's mistake about the facts or the law generally isn't one. The grounds to vacate are narrow and include an award obtained by fraud or other undue means, evident partiality or misconduct by an arbitrator, and an arbitrator who exceeded its powers or refused to hear material evidence.
The deadlines are short. The Texas and federal acts each set their own time limit, running from the award, for asking a court to vacate it.
A mediator, often a retired judge or experienced lawyer, usually meets with each side separately and carries proposals back and forth. If the parties agree, they sign a written settlement before leaving, so we arrive with the client's terms ready.
The claimant files a demand with the provider the contract names, such as the AAA or JAMS.
The parties select one arbitrator or a panel of three under the contract or the rules.
The arbitrator sets the schedule, document exchange and any depositions.
Witnesses testify and exhibits are presented, often in a conference room or by video.
The arbitrator decides the case, and a court can confirm the award as a judgment.
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Ask a QuestionOften faster, but not always cheaper. Arbitration usually involves less discovery and very limited court review, but the parties pay the arbitrators as well as administrative fees based on the size of the claim.
Usually, yes. Texas law lets a court refer a pending case to mediation, though a party can object, and the court may not order it if the objection has a reasonable basis.
Generally, yes. Communications about the dispute made in mediation are confidential and can't be used as evidence against the person who made them. Documents and facts that are discoverable on their own don't become protected just because they were used in mediation.
A signed written settlement agreement is enforceable like any other written contract, and the court can make its terms part of the final judgment. That is why the agreement signed at mediation should cover every essential term, including payment dates and releases.
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