What is the Difference Between Arbitration and Mediation?

Arbitration and mediation are both forms of alternative dispute resolution (ADR) aimed at resolving conflicts or legal issues without a lengthy legal battle. However, there are key differences between the two:

Mediation:

• The final decision is a reached agreement between the two conflicting parties.
• Involves a neutral third party, called a mediator, who helps the parties resolve their issues collaboratively.
• The mediator does not have the power to decide the dispute.
• Mediation is a non-binding process.
• It is less expensive and usually less formal than arbitration.
• Mediation is private and confidential.

Arbitration:

• An arbitrator analyzes the case details and reaches a verdict.
• The arbitrator serves as a private judge and is in control of the process and the outcome.
• Arbitration can be either binding or non-binding.
• It is more expensive than mediation but less expensive than traditional litigation.
• Arbitration is usually less formal than a courtroom trial.
• The arbitration case is confidential, but awards are publicly available.

In some cases, both mediation and arbitration are necessary to reach a solution, a process called "med-arb". In this process, the parties first attempt to resolve the issue on their own with the help of a mediator. If they cannot come to an agreement, the mediator transitions into an arbitrator role and decides on an outcome.

Comparative Table: Arbitration vs Mediation

Here is a table comparing the differences between arbitration and mediation:

Both arbitration and mediation are non-judicial forms of dispute resolution, but they have different approaches and outcomes. Arbitration is a more formal process where parties select a neutral third party, called an arbitrator, who listens to facts and evidence and renders an award. Mediation, on the other hand, is an expedited negotiation facilitated by a mediator who assists the parties in identifying key issues and considering options and alternatives.