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Difference among mediation, arbitration and litigation in China

As an China international arbitration lawyer and China litigation attorney, I have always want to talk about the difference among mediation, arbitration and litigation in china.

Many people want to know what litigation is, what the ramifications of litigation are and whether there are any alternatives to litigation. Generally, litigation is when one party sues, or files a lawsuit, against another party.  The filing of the lawsuit kicks off litigation and the parties are now involved in a lengthy battle that can be extremely expensive as well as emotionally draining.  Once in litigation, you are officially under the jurisdiction of the relevant court system.  This means your attorney will be working with opposing counsel, judges and their clerks.  The lengthiest and most challenging aspect of litigation, prior to trial, is discovery.  This is where both parties engage in fact finding to strengthen their case.  Discovery can be extremely expensive especially when a case is complex and involves multiple expert witnesses.  Finally, if the case has not settled, litigation ends in a trial.  Trials are held in front of judges, in the presence of a jury and the jury returns a verdict in favor of a party. 

There are several alternatives to litigation, which can occur contemporaneous with litigation, including Mediation and Arbitration. Mediation is a way to facilitate settlement of one’s claim through the use of a neutral and detached umpire. Normally the mediator is chosen with the consent of both parties or may be selected by the court in the case that a judge has ordered the parties to take part in mediation.  The mediator does not act like a judge; rather, the mediator attempts to point out the strengths and weaknesses of ones case and highlights other factors that the parties may not have considered. Moreover, the Mediator does not offer legal advice nor does he represent any of the parties present – he is neutral and detached.  Mediation is a useful approach as it may result in settlement of the claim, or, at the very least, the parties leave the mediation with an understanding of how far or close the two sides are to settling their case. 

Arbitration is similar to a trial.  An arbitrator presides over the proceedings (there may be more than one arbitrator present) and makes findings of law and facts and writes an opinion. Arbitration may be binding on the parties.  Typically, there will be three arbitrators involved where each party selects an arbitrator and then the two arbitrators select a third.  At the conclusion of the arbitration, the arbitrators will draft a written opinion deciding who is victorious.  If the arbitration is binding, then the opinion is also binding; if not, then the arbitration decision may be appealed. 

As one can imagine, the different forms of alternative dispute resolution have drastically decreased the amount of litigation that takes place and, even more so, the amount of trials held.  However, just like litigation, Arbitration and Mediation require much preparation and skill.  It is not advisable for one to engage in the foregoing alone.  You should seek the advice of an attorney who has experience litigating, arbitrating and mediating cases.

We cannot say arbitration, mediation and litigation which one is better. We have to choose according to specific circumstance of each case.

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I am a licensed China lawyer. Most clients are foreign nationals and companies. China Lawyer Blog have associates in Beijing, Shanghai, Tianjin, Guangzhou, Suzhou, Nanjing, Qingdao, Fuzhou, Hainan, Hefei, Wuhan, Xian, Changsha, Xiamen and Hangzhou. Learn More

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China Lawyer BLog AuthorPeter Zhu, an experienced China attorney licensed to practice law for more than ten years, the author of this China Lawyer blog, welcomes any enquiry or consultation related to Chinese law.