What is the Difference between Mediation and Arbitration?

Mediation and arbitration are both forms of alternative dispute resolution (ADR), meaning alternatives to the expensive and time-consuming litigation of a lengthy court battle. Mediation and arbitration are similar in that they bring together parties in conflict to resolve an issue outside of the courtroom, but each has its own unique way of doing so.

Mediation Brings Parties Together to Find Voluntary Solutions

Mediation is an alternative process for conflict resolution that provides a number of advantages over going to court. The parties, with or without counsel, engage a neutral third party Mediator to facilitate productive conversation between them and help each side clarify its interests and concerns. The parties retain control over the entire process, including the format of the process, who can attend the mediation, and how to resolve the dispute. Mediation is less expensive and considerably faster than a court proceeding, and can occur at any time during the pendency of the dispute. Mediation is a confidential proceeding conducted in a less intimidating environment than a courtroom. Solutions can be creative and more suited to the needs of the parties than what the court might be empowered to order.

Mediators do not make decisions or rulings. Rather, they help the parties create their own voluntary agreement in a confidential setting. The agreement, when signed by each party, is a binding contract. If a settlement cannot be reached in mediation, the parties reserve all of their options to pursue another form of ADR or take their issue to court.

Arbitration Relies on a Neutral Third Party to Determine an Outcome

Like mediation, arbitration utilizes a neutral third party, called the Arbitrator, to resolve the conflict between the parties outside of a courtroom. However, unlike mediation, the Arbitrator serves as a private judge to listen to the evidence and make rulings to determine the outcome of the dispute. Thus, in arbitration, the private judge is in control of the process and the outcome, whereas in mediation, the disputing parties maintain control.

Most Arbitrators will be flexible and work around the schedules and needs of the parties. And although arbitration is usually less formal than a courtroom trial, there will be a set of procedures that will apply to both sides as they prepare for the hearing. In most cases, the award of the Arbitrator is final and binding on both sides. The opportunity to appeal after a binding arbitration is very limited.

If you are interested in learning more about mediation and arbitration services or alternative dispute resolution or you believe you are involved in a situation that could be resolved through mediation, contact us online or call 303-798-2533.