In Arbitration, the Arbitration Hearing Panel controls proceedings and outcomes. In Mediation, the disputing parties control proceedings and outcomes. Arbitration is a formal process, governed by strict procedural rules and legalities. In Arbitration, the Arbitration Hearing Panel controls the proceedings and renders a determination that is binding on the parties (Award of Arbitrators). The Arbitration Panel awards the amount in dispute to one party or the other, thus one party wins and one party loses. By contrast, Mediation is a voluntary process that brings disputing parties together in an informal setting to resolve their differences with the help of a trained mediator, who serves as a facilitator, not an adjudicator. The parties are free to fashion any resolution to which they can agree. Because the terms of settlement are decided by the parties themselves, Mediation typically results in win-win outcomes.
Mediation is faster and less expensive than Arbitration because proceedings are unencumbered by the procedural rules and legalities of Arbitration. This minimizes the need for paperwork, documentation and administrative processing, which saves members and LIBOR time and money. The fact that fewer people are involved in the process (i.e. no hearing panel) also expedites proceedings. Furthermore, there is no filing fee associated with Mediation for Ethics disputes and Mediation prior to filing an Arbitration Complaint. The fee for Mediation after filing an Arbitration Complaint is included in the Arbitration fee.
Arbitration is an adversarial process because there is always a winner and loser. Mediation is a conciliatory process because there is more opportunity for negotiating win-win solutions because the process encourages constructive dialogue and actively enrolls parties in resolving issues and finding mutually acceptable solutions for settling their dispute.
LIBOR encourages REALTORS® who have a dispute to attempt Mediation before a formal request for Arbitration is filed. If the parties agree to mediate, and the Mediation is successful, the dispute is considered settled and the case is closed. If the parties fail to resolve their dispute during Mediation, they may still invoke Arbitration through LIBOR’s Arbitration procedures. Should an Arbitration hearing ensue following a failed Mediation attempt, no offers of settlement may be used as evidence at the hearing, and the Mediator may not appear as a witness for either party.
When a REALTOR® submits a request for Arbitration, even if Mediation has been previously attempted, LIBOR automatically offers the parties the opportunity to mediate before the Arbitration Hearing is scheduled. If both parties agree to mediate, and Mediation is successful, the case is closed and the filing fees paid by the parties are refunded in full minus a mediation fee. If the parties fail to resolve their dispute through Mediation, the case is referred to a hearing in accordance with LIBOR’s Arbitration procedures.