Question

Your company, XYZ, Inc., wants to create an outdoor area adjacent to its office building for its employees to enjoy during lunch, breaks or during non-business hours.The city, Village Township, has restrictions of the use of the land (zoning) and the type of structures that may be erected on the land. The plans that your company have created is in violation of the city ordinances. Your company does not want to spend a lot of money to resolve negotiate with the city regarding the ordinance problem because the plans and cost of building the park are over budge. You are in charge of helping find a resolution for this conflict with the city. You report directly to the CEO of XYZ, Inc., and she has asked you to research whether arbitration, mediation or litigation would be in the best interest of both parties to resolve this conflict.

1. Differentiate the roles of a mediator and arbitrator so your boss clearly understand the difference.
2. Explain all three options (arbitration, mediation, and litigation) in relation to the conflict with they city.
3. Explain which option you think is best for the company to resolve this conflict.
   • Describe why it's the best option for the company based on the facts related to the company and the conflict.
   • Provide references to resources that help support for your position.

Answer 1

Arbitration and mediation are two methods of solving disputes out of court. In case of mediation, a mediator is appointed who will try and reason with both the parties and find a solution to the problem which is acceptable to both the parties. However, the decision given by the mediator is nor legally binding. A mediator need not be a lawyer or a judge. It can be any person whose appointment is acceptable to both the parties for conflict resolution.

On the other hand, decision given by arbitrator is legally binding on the parties involved in the dispute. Also arbitrator is often a person having some legal powers, namely a lawyer or a judge and is often approached when stakes are higher for both the parties.

In case of arbitration, many a times, it is a panel of members which is appointed to resolve an issue because the parties do not accept others’ choice. In such cases, each party appoints its representative to the panel who in turn selects some neutral person for completing the panel. Arbitration is resorted to when mediation is not acceptable to the parties and litigation seems expensive.

In the current situation, company should go for the option of mediation as the results will not be biding for the firm. In case, mediator tells a solution which is not acceptable to the company, they can still approach for litigation. However, if the city council agrees to their demands, it will not be required. Also, the cost involved is generally very less as compared to litigation and arbitration. Mediators will also help the company in understanding the legal issues involved and in case the violation of these issues come out to be very expensive, the company can go for preparing the designs again.