What is the Difference Between Arbitration and Mediation?

What is the Difference Between Arbitration and Mediation?

Not every case goes to trial. In fact, most do not. The fact that some cases do not go to trial does not necessarily reflect each cases merit. Cases resolve prior to trial for a multitude of reasons. For instance, a case may settle. In a different instance, a case may be resolved on summary judgment. Simply put, why and how a case resolves depends on many factors.

There are a couple of different mechanisms in the litigation process that can be utilized to help facilitate a possible resolution of a case. The two processes discussed in this blog are arbitration and mediation. These two ADR (“Alternative Dispute Resolution”) methods are often used and are highly successful in helping a contentious matter come to a resolution. In addition to being useful, both arbitration and mediation provide cost effective alternatives to a long litigation process.

Arbitration is “[a]n ADR method with one or more persons hearing a dispute and rendering a binding decision.” The key aspect of arbitration is that it is binding. Parties may agree to arbitration by contract. For example, a party may sign a contract with another party and in that contract the parties agree if there is a dispute, the matter must be resolved by arbitration as opposed to a trial. Depending on the jurisdiction, there may be particular arbitration rules. It is important to be apprised of these rules going into arbitration.

Switching over, mediation is “an ADR method with a neutral person helping the parties find a solution to their dispute.” Mediation is an opportunity for the parties to see if they can voluntariness resolve their matter. Although a judge or court may require mediation during the course of a litigation, entering into a settlement agreement during mediation is voluntary. The purpose of mediation is to welcome and provide the parties an opportunity to come to the table and see if the specific matter can be resolved. The mediation process is facilitated by a third-party. In most incidences, the parties confer and agree on an acceptable mediator. The mediator speaks with each party individually and attempts to help the parties come to an agreeable settlement.

As you can tell, arbitration and mediation are both viable ADR processes to help resolve a lawsuit. Understanding both methods can help one determine the best way to potentially resolve a matter. To that end, considering the possible ADR methods at the parties’ disposal can aid a claim to an amicable resolution.