Disputes can occasionally arise between church employees or between an employee and the church itself. These disputes are often:
- Costly
- Time-consuming
- Damaging to relationships
If an employee sues the church, the lawsuit may not be covered under the church’s liability insurance policy, due to exclusions for employment practices.
Church board members must take steps to reduce the likelihood of such conflicts.
The Case for Mediation and Arbitration
One solution worth serious consideration is mediation and arbitration.
Using informal dispute resolution methods is an idea whose time has come, especially given the deficiencies of the civil court system:
- Litigants often leave as enemies.
- Court delays are notorious.
- Legal expenses can be substantial.
- Court results sometimes feel arbitrary.
Many business corporations now use alternative dispute resolution (ADR) methods—and churches can do the same.
How Mediation and Arbitration Work
The process is straightforward:
- Mediation first:
Parties agree to attempt resolving their dispute through nonbinding mediation. - Arbitration if necessary:
If mediation fails, the parties present their dispute to one or more arbitrators, who make a binding decision.
Using this approach typically results in:
- Faster resolutions
- Lower costs
- Fairer outcomes
Two Additional Reasons to Consider Arbitration
Beyond speed, cost, and fairness, churches have two additional compelling reasons to consider arbitration:
- Most Church Lawsuits Involve Insiders
Many lawsuits against churches are brought by insiders—members and employees. Arbitration is particularly well-suited for these types of disputes. - Scriptural Support for Internal Resolution
In 1 Corinthians 6:1-8, the apostle Paul urges Christians to resolve disputes within the church, rather than taking them to secular courts.
This biblical principle aligns closely with the concept of church-based arbitration.
🔹 Quick Benefits of Arbitration for Churches
- Faster resolutions — Avoid court delays and lengthy trials.
- Lower costs — Save on attorney fees and court expenses.
- Fairer outcomes — Use neutral arbitrators who understand church matters.
- Relationship preservation — Resolve disputes without deepening conflict.
- Scriptural alignment — Follow 1 Corinthians 6:1-8 guidance for internal resolution.
- Insurance advantages — Coordinate better with your liability coverage.
Tip: Always involve your insurance company and legal counsel when drafting and adopting an arbitration policy.
Key Considerations When Drafting an Arbitration Policy
If your church decides to implement arbitration, keep the following important points in mind:
1. Implementing the Policy
- The best approach is for the church membership to adopt an arbitration policy as an amendment to the church bylaws.
- Since members are bound by the bylaws, this method gives the best chance of making the policy binding.
What Types of Disputes Will Be Covered?
Decide carefully which disputes will be subject to arbitration:
- Disputes relating to church affairs?
- Disputes between a minister and members?
- Disputes between a minister and the board or the church?
- Disputes between employees and the church?
Recommendation:
Avoid covering disputes solely between members, such as a member tripping and falling at another member’s home. These are not appropriate for church arbitration.
2. Conducting the Arbitration Process
Key questions to address:
- Selection of Arbitrators:
Typically, each side selects one arbitrator, and those two choose a neutral third arbitrator. - Formality of Proceedings:
Arbitration procedures are often informal. Involvement of attorneys may be optional. - State Law Compliance:
Some states have arbitration statutes that offer helpful guidance. Always consult state law.
3. Involving the Church’s Liability Insurance Company
Before adopting an arbitration policy:
- Contact the church’s insurer to confirm whether the company will:
- Recognize and honor the arbitration policy
- Pay arbitrators’ awards up to policy limits
Important:
If you later change insurance companies, obtain the same assurances from the new carrier.
The arbitration policy should condition its use on acceptance by the church’s liability insurer, whoever that may be.
Also, work closely with legal counsel to draft the policy properly.
A Wise Step for Church Leaders
We are living in a time of litigation explosion, and churches are not immune.
Many church-related lawsuits today are employment-related.
If you agree that civil litigation is:
- Expensive
- Time-consuming
- Often arbitrary
then it’s time to seriously consider alternatives like arbitration.
As a church board member, you owe it to yourself—and to your congregation—to explore this effective method of resolving disputes.
