Source: The CPA Journal

CPAs should advise clients to consider mediation before submitting an action to arbitration or litigation. An estimated 85-percent of mediation cases are settled without the necessity of arbitration or litigation.

Mediators try to detach the parties' emotions from the problems being resolved.

In mediation, the parties create their own solutions rather than having to submit to the decisions of judges or arbitrators. The parties do not commit to anything except to negotiate in good faith. They are not bound by the decisions of third parties.

Arbitration, while better than litigation, is not as effective as mediation. The decisions of arbitrators are binding and cannot be appealed except in cases of fraud, decisions beyond the scope of the identified problems, or refusals to postpone the proceedings if the requests are reasonable.

From The CPA Journal, A Publication of the New York State Society of CPAs, April 2006.

For the complete article, click on the following link: http://www.nysscpa.org/cpajournal/2006/406/essentials/p64.htm.