Mediation vs. Arbitration – What’s the Difference?
The main difference between mediation and arbitration is the process used to solve your conflict. Both options will help you solve a legal issue outside of the traditional court process, but they use two different methods to get you from A to Z.
- Mediation: is a legally binding process generally conducted with a single mediator who does not judge the case but facilitates discussion and eventual resolution of the dispute. Typically the less expensive and quickest way to get a settlement. Mediation is completely “without prejudice” and confidential to the parties, which encourages open and imaginative negotiation leading to 90% of all cases being settled.
- Arbitration a typically slower and expensive albeit binding process that replaces the full trial process with multiple (often three) chosen people to serve as judges in your case
Arbitration is generally conducted with a panel who take on a role like that of a judge, make decisions about evidence and give written opinions (which can be binding or non-binding). Although arbitration is sometimes conducted with one arbitrator, the most common procedure is for each side to select an arbitrator. Then, those two arbitrators select a third arbitrator, at which point the dispute is presented to the three chosen arbitrators. Decisions are made by majority vote.
Arbitration and mediation are similar in that they are alternatives to traditional litigation, and sometimes they are used in conjunction with litigation (opposing parties may first try to negotiate, and if that fails, move forward to trial). Both arbitration and mediation employ a neutral third party to oversee the process, and they both can be binding.
The Success of Mediation in Modern Litigation
Litigation is generally something people seek to avoid. It’s expensive, time consuming, emotionally draining and unpredictable, until a judge or jury decides the case, you can never be certain of the outcome.
Because litigation is so inefficient for most of us, alternative dispute resolution, such as arbitration and mediation, has become increasingly popular. But before moving forward with possible alternative dispute resolutions, you should first know the difference between arbitration and mediation.
Mediation has enjoyed increasing popularity as an important part of the litigation process. For example almost all cases in the U.K. are required to be mediated before a court will allow them to be put on the trial calendar. The reasoning behind this requirement is to minimise court time , deal with proportionality of legal costs, reject uncrystallised cases. Because mediation has proven effective in reducing court time and trials, and offers a more efficient, cost-effective option to litigation.
Mediation enjoys such high success rates because the parties are brought together in an environment where they can freely and confidentially present their position in front of a neutral third party.
Mediation attempts to limit the issues and put them into proper perspective. Participants often feel much better after having an opportunity to get things “off their chest,” and also benefit from hearing the other party’s point of view. The neutrality and more relaxed atmosphere of mediation may eliminate the desire to continue hostile litigation once both parties have seen all the issues in a fair light.
Mediation can be used for any kind of dispute; there is no need to wait until a dispute results in a lawsuit and is sent to mediation by a judge. Pre-lawsuit mediation is becoming more widely accepted as a sensible way of resolving disputes before they turn into litigation. Besides being confidential and non-binding, mediation is relatively quick and inexpensive compared to litigating
When the parties come to an eventual agreement, the parties themselves will put the agreement in writing and sign it so that it then becomes a binding contract.
If you want to mediate a dispute, you and the opposing party should enter into a pre-mediation contract. This simple contract should include the following:
- The mediation should be confidential.
- The parties should agree on who will conduct the mediation and how the mediator will be paid. The cost of the mediator is typically split between the two parties.
- The parties should agree on the length of the mediation. Most mediation is scheduled for either a half-day or a full day.
- The parties should agree to mediate in good faith.