Some of these schemes have worked, some have been dismal failures. For example, it is in vogue today for the courts to include, as part of the litigation process, mandatory mediation between the parties. Mediation is a process that grew out of the social sciences where the parties, sometimes with and sometimes without their lawyers, attempt to resolve their dispute through a neutral third party, generally a paid, professional mediator. Mediation is never binding and if it is unsuccessful, the lawsuit proceeds to trial. Another scheme that has been implemented, originally in the labor and construction law areas, is arbitration.
Arbitration can be binding or non-binding.
If arbitration is binding, the decision of the arbitrators is final and cannot be challenged in court. Arbitration oftentimes has been called a private court system. However, in recent years, many agreements, such as credit card agreements, warranty agreements, real estate agreements and the like make arbitration a requirement and state where the arbitration will occur, what law will apply, how the arbitrators will be chosen, who pays the costs and what rights the parties have to go to court. In our experience, arbitration is rarely significantly cheaper than litigation in the courts. The only real advantage is that it is usually faster and final.