Mediation vs. Arbitration: Your Options For Settling Disputes Out-of-Court

Wooden Gavel, Pile of Books, and a Weighing Scale

Mediation and arbitration share the same intent, which is to arrive at a fair resolution of whatever issues are being discussed. There are, however, some key differences.

Parties that submit their issues to mediation-arbitration services should understand the differences between the two.

Mediation

In mediation, mediators are there during the process but they will not take over the issue, find out who’s at fault, or determine what should be done. Mediators assist the involved parties in finding common ground and a way to communicate, share information, and talk about options.

Mediation procedures are different depending on the situation, but the usual course of action involves a meeting between parties, with the mediator present, and an explanation from the parties regarding their side of the dispute. The mediator may decide to meet separately with each party. 

A discussion of the dispute takes place, followed by a discussion on what could be done for the resolution of the conflict. This may need to happen several times, with the mediator meeting with the parties separately. The parties will sign a settlement agreement when the resolution is satisfactory for all. Parties that want to be part of the process often do well with mediation.

Arbitration

An arbitration process is more formal compared to mediation. Most arbitrators have or still practice law, such as a retired judge or a lawyer still practicing. It may also be another professional, such as an engineer or an accountant.

The arbitrator gives the parties an opportunity to present their side of the dispute. Witnesses may be called upon to help the arbitrator find out more about the case. Lawyers representing the parties can question the witnesses.

Parties that choose arbitration typically do not negotiate out of court. The decision of the arbitrator is legally binding and enforceable.

Parties that would rather not settle a dispute in court can go for either arbitration or mediation. It is usually the preferred method as parties can keep the matter reasonably quiet, the costs may be lower, and the process may take a lot less time.