UPDATED AUGUST 1, 2019
Most people know what a lawsuit is and people are generally familiar that a plaintiff may file a lawsuit and at the end there eventually is a trial. But many people are unfamiliar with the terms, “mediation” and “arbitration”, despite the fact that both kinds of proceedings play crucial roles in the vast majority of New Jersey civil cases. Below we will briefly go over these proceedings and illustrate how they are effectively used during civil litigation in New Jersey.
As a background, note that very few cases are actually decided by a trial in New Jersey. The vast majority of cases are settled or otherwise resolved through other means. Yes, a lawsuit will conclude with a trial if the case is not resolved or dismissed before the trial date. But since we have the ability to resolve disputes quicker and cheaper than full trials, it is unlikely that the average case will actually go to trial.
A mediation is a proceeding where a neutral third-party (the mediator) helps the plaintiff and defendant work out a settlement. No one is ever forced to settle – settlements are always voluntary on both sides. But a mediator can help the people involved strike a deal. There are no set rules in how a mediation specifically proceeds. Each mediator has their own style and method to bringing the parties to an agreement. But basically, mediators will listen to both sides and try to make everyone understand the other party’s position. In doing so, the parties are able to come to a fair compromise and settle the case. Mediators come in many different types: retired judges, court personnel, practicing attorneys, etc.
Mediation is seen most commonly in three situations in New Jersey cases. First, if you file a lawsuit in the Special Civil Part (cases with $15,000 or less in dispute) then your cases will usually be assigned a mediator at the court house on the day of the trial. Second, larger civil cases in the Law Division involving money (as opposed to personal injury and other torts) are often flagged by the judge as a candidate for mediation and the case will be assigned to an impartial lawyer to mediate the case. In both of those situations, there is no fee for the mediator and you are required to attend the mediation, in good faith, but you are not required to settle anything. Third, in larger civil cases, especially those involving catastrophic injury and wrongful death, the parties may agree to go to mediation and try to settle rather than proceed with lengthy and expensive litigation. This is mutually voluntary and it is not free; typically the attorneys will hire a retired judge from the area who can assist as mediator.
Arbitration has similarities to mediation but it is a very different type of proceeding. In an arbitration, one or more impartial third-parties will act as arbitrator, listen to the attorneys, listen to testimony, and review other pieces of evidence. At the end, the arbitrator renders an award, which will say what the arbitrator thinks in terms of who is at fault/responsible and how much, if anything, they should pay. Arbitration can be binding or non-binding (i.e. anyone can reject the award and proceed to trial) or a combination of the two (i.e. either party may reject if the award is over a certain monetary limit, or some other parameter is reached). Arbitration may range from something very brief and informal to a very formal, lengthy proceeding. The goal of arbitration is to get a ruling by a neutral third-party without the cost and delay of going to trial. Common examples of arbitration in New Jersey cases are as follows: All personal injury cases in NJ are referred to an informal, non-binding arbitration at the court house (either party may reject and opt for trial); Claims for insurance benefits like medical expense reimbursement and uninsured motorist benefits are arbitrated per the insurance contract and they are typically binding or partially binding; Litigants in personal injury cases sometimes will agree to submit the case to a binding arbitration outside of court; Many contracts (like construction and repair contracts) have clauses that require all disputes to be submitted to binding arbitration rather than a lawsuit.
In the typical New Jersey civil case, arbitration and/or mediation will very likely be a part of the process. If you are involved in a case, your attorney can explain to you the process for you specific case and the goals and benefits of the proceeding.