Sometimes in the heat of the moment, when disagreements are at their worst, the  possibility of solving a problem without going to court seems remote at best.  Arguments may have been brewing for days or weeks with each side becoming more  and more entrenched in their own rationale and reasoning. Lines may have been  drawn in the sand and threats of litigation hurled with reckless abandon.  

 Even when tensions are high and feelings have been hurt, however, there is a  solution: alternative dispute resolution, which most frequently encompasses  either arbitration or mediation. The difference between the two, says Jill S.  Tanz, JD, of Chicago Mediation LLC, is that “arbitration is normally a binding process where both parties expect a decision.  Mediation is non-binding and voluntary.”  

 Charles Castagna of the Clearwater, Florida-based firm Charles N. Castagna  Mediation, Inc., adds, “Arbitration is more of an adversarial process. The arbitrator makes a decision  while the mediator does not. With mediation, the parties have an option to  disagree and say no, I don’t think I want to do that.”  

 Arbitration can almost be thought of as a mini trial, and most of the time,  Castagna says, those sides “are able to come to an agreement.”  

 How Did We Get Here?

 Just about anything can lead to the need for arbitration or mediation. The most  common reasons are breaking the rules and/or violating a covenant of the  association. Next, you find disputes over public records, access to association  files and financial records, and lastly, the bylaws.  

 Castagna believes that violations of bylaws offer the most opportunity for  trouble. The violations, he says, can range from “grass that’s too high to having a door painted blue that should have been a different shade  of blue. It can get down to that level of minutiae but these issues are  important to the boards.” There can be bigger issues, too, such as residents running home businesses out  of their units, in violation of the governing documents. In short, wherever it  is possible to have two opinions or sides, it’s possible to have a potentially litigious disagreement. And the best way to  avoid that is by pursuing arbitration or mediation.  

 How It Works

 When do you use arbitration and when do you use mediation? According to the  American Arbitration Association (AAA), arbitration is “the submission of a dispute to one or more impartial persons for a final and  binding decision, known as an award.”  

 If arbitration sounds a lot like a lawsuit, it’s supposed to: The primary difference between arbitration and a lawsuit is  essentially the degree of formality used by the people involved. Arbitration  was actually here first: the Egyptians, Greeks, and Romans all resolved  conflicts using the arbitration method before instituting a formal court  system. Mediation and negotiation, other forms of ADR, are similar to  arbitration in terms of process, except that the decisions made in those  processes are usually voluntary and non-binding.  

 Though the formal court system certainly has its advantages, (the right to  appeal, recognized precedents, etc.) when a plaintiff brings a problem into a  court of law, there’s a lot of red tape involved—tape that is theoretically eliminated in ADR. Lawsuits must be scheduled far in  advance; arbitrations in most cases, can be heard quickly. If you file a  lawsuit, there are many rules of evidence to follow; those rules don’t apply in ADR, so you can take your time explaining your case and bring in as  many homemade pie charts as you like. Juries hear most lawsuits; there are no  juries in ADR proceedings. With ADR, an award is decided by a neutral third  party that could be an attorney, a retired judge, a teacher, businessperson,  psychologist, or anyone with expertise relevant to the case.  

 Arbitration decisions are not final or binding unless specified in a contract’s arbitration clause. If the decision is binding, an appropriate court will make  the award an enforceable judgment. If either party is unsatisfied with the way  things worked out, they are free to pursue formal legal action from there.  

 The AAA

 To fulfill its mission, spokesman Wayne Kessler, vice president of corporate  communications, notes that the AAA maintains a national roster of over 8,000  impartial experts or arbiters, “neutral” parties who hear and resolve filed cases. Neutrals are attorneys as well as  non-attorneys, Kessler says, and they are people, who are recognized for their  standing and expertise in their fields. They are nominated to the roster by  leaders in their industry or profession. Their collective expertise is  wide-ranging; all have at least a decade of industry-specific expertise in  areas like construction, employment, health care, real estate, and technology  to name just a few, he adds.  

 The AAA provides a simplified filing process for each case and then directs the  case to the correct department by an expert intake team. To reduce the cost of  in-person meetings, the AAA, says Kessler, also provides video conferencing and  their website provides instruction for online case filing and user feedback.  Alternatively, cases may also be filed through the AAA's offices nationwide,  which are staffed by professional case managers.  

 If you happen to be one of two or even three parties involved in a dispute and  you are offered the chance at mediation, what can you expect from the process  itself? First of all, it is a far more relaxed process than anything that would  possibly take place in a court house. “Pre-suit and without a court order, the association’s attorney will contact a mediator and mediation will be scheduled at a mutually  convenient time,” says Castagna. “At the mediator’s office, he or she will introduce the session by explaining the process and the  idea of reaching an agreement in a confidential setting. The lawyers may make  opening comments and then the parties will speak. We may put groups in  different rooms to talk with the mediator, which is known as caucusing. The  mediator cannot repeat things from one room to the other without the permission  of that party.”  

 The idea of confidentiality is important to the mediation process. Information  provided by one party outside of earshot of the other must be kept secret by  the mediator. At the same time, should the argument continue onto court, none of the information gathered as a result  of the mediation process can be used against either of the two parties. The  exceptions do not often apply to co-op and condo disputes and only come into  play in cases of criminal activity such as child or elder abuse or the threat  of committing a crime. Short of criminal action or intent, everything said  within the mediation process stays within those four walls.  

 The arbitration process may take a similar route except that one party may be  judged to be in the wrong and the other in the right and whatever decision that  arbitrator makes to rectify the situation is legally binding and must be  followed.  

 Better Than Court

 The benefits of alternative dispute resolution are many and the drawbacks  negligible at best, especially for disputes originating in residential  communities. “Mediation is ideally suited to these types of disputes,” says Tanz. People who take part in mediation “come to understand not just what they’re coming in and asking for but why they want it and what the alternatives might  be. It’s a more forward looking approach.”  

 And in the long-term, it can help preserve the fabric of the community,  something of vital importance when a disagreement flares between neighbors. The  process of mediation forces a re-evaluation of positions in many cases and may  help clarify issues that are in dispute.  

 Mediation and arbitration also save time as the court system is routinely  backlogged with cases in any jurisdiction. Alternative dispute resolutions can  be set up and enacted quickly. They also cost significantly less, which is of  significant benefit to the individual unit owner who may not have the resources  that a board and its team of attorneys do. Whereas legal fees for a trial can  run into the thousands or even tens of thousands of dollars, mediation can be  done for as little as a few hundred dollars split between the two parties. “It will save the individual unit owners money and the boards will save money,  which is actually the entire community’s money. If it costs $10,000 to pursue a lawsuit on behalf of a 100-unit  association, that’s $100 per resident.”  

 The time and money saved through alternative dispute resolution has proven so  beneficial over the years that the state of Florida has made it nearly  mandatory offering the option of mediation even before a case can head to  court. And if the parties disagree with the outcome of that arbitration, they  have 30 days to decline it and then the matter will proceed to trial.  

 When trouble arises between boards and residents or even between neighbors,  everyone involved may find it better to defer that instinct to sue. As  litigious a society as we have become, it is vitally important for the health  and financial well-being of all involved to remember that there are other ways  to solve a problem. For less money, less time and far less stress, mediation  and arbitration may offer the solution to even the most difficult  disagreements. Although it involves compromise—a difficult pill for anyone who feels wronged to swallow—it can pay off in the long-run and preserve the peace among neighbors who most  likely will still be seeing one another day in and day out. As Castagna says, “You have very little to lose, just a few hours of your time.” And isn’t that worth it?    

 Liz Lent is a freelance writer and a frequent contributor to The South Florida  Cooperator.