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Mediation vs Arbitration?

  • 5 min read

What is the difference between Mediation and Arbitration?

The question that comes up very frequently is what is the difference between arbitration and mediation?

Mediation vs arbitration.. lets dive in. If you have a dispute with somebody, whether it’s a court case or a contract case; many times the subject of mediation or arbitration will come up. It’s important to know the differences between the two. First of all, both methods are alternatives for resolving a dispute.  What’s called ADR: alternative dispute resolution, and it’s an alternative to the legal process where you go to court. You will have a lawsuit or you have other legal proceedings. The alternative methods such as mediation and arbitration have advantages. You’re not going to have legal fees, won’t have a court process, (which can take months or even years in some cases), and you also have some control over the process. 

During the court process you’re basically surrendering your outcome to the whims of the court. Could be a judge, or a jury. Arbitration and mediation, you retain some control over the process. In fact both of them are considered to be plaintiff controlled processes. Now that’s where the differences come in:

Mediation is a form of having a third party to assist with a voluntary solution. It’s an alternative process for conflict resolution. It provides advantages over going to court. The parties can do it with or without an attorney, and  have a third party mediator to help facilitate a conversation between them. Also it helps both sides discuss and clarify their interests, and what their concerns may be.  Many times the interests and the solutions already have a lot of overlap. They don’t need as much dispute resolution as needed. The parties retain control over that process; including the format, the when, the where, the how,  who can attend, and how to resolve the dispute. 

It’s a lot less expensive than going to court and it can occur any time. During the conflict or dispute,  mediation is confidential and it’s a less threatening environment than going to court. The solutions can be more creative where courts may have certain requirements. You can custom tailor the solution for both parties or all parties, whereas the court might not be able to do that. In mediation, the mediator doesn’t tell you what you have to do. Usually it’s not binding, more of  a suggestion that they try to facilitate the results if both parties voluntarily agree to what the mediator suggests.

 In many cases they don’t suggest or come up with anything. They show the parties where they already have an answer. Now once the agreement is signed,  its now binding; so both parties still have control over their future during the mediation process. If the mediation doesn’t produce a desirable result for both parties; no harm no foul. You start back where you were, you can look at another form of alternative dispute resolution.  Arbitration.

 Arbitration has some similarities:

It’s a third party that’s neutral. The third party isn’t related to either one of the conflicted entities. They’re not taking sides for either party. The arbitrator takes information from both parties and looks at what the solution might be. Unlike mediation, an arbitrator serves as kind of like a private sector judge. They listen to the evidence, and they make a ruling to determine the outcome of that conflict. The other difference is the arbitrator is in control of the process. They dictate when, where, and how things are going to be done. They’re usually more flexible than court. You don’t have to have a hearing date, they usually give you more flexibility than a private or public sector. It is less formal than a court case, however, the difference is the arbitrator’s ruling is final and usually binding on both sides. You may be able to appeal it, you may be able to go to court. Usually that’s limited by contract or by what’s dictated by the court. 

A mediation is voluntary, the other is who’s in control of the process. Usually in mediation, the parties are in control with a mediator facilitating it. Suggesting dates, times, and whatnot. Whereas in arbitration the arbitrator says: here’s how we’re going to do it and here’s what the process is. Hopefully that clears up what the differences are. They’re both very valuable. Anything you can do to keep out of court is a good thing. Ask any lawyer, they’ll tell you to stay out of court. As soon as you go into court the whole thing’s out of your hands. You don’t have control over your destiny anymore. Anything you can do to stay out of court is good. Mediation and arbitration negotiation is better and having a neutral third party helps. It takes the feelings and thoughts out and maybe baggage out of the equation. Where if you are negotiating directly or even with your attorneys; you’re going to have some baggage involved. Neutral third party can help quite a bit in either case.


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