What is the difference between arbitration and mediation? Many people don’t know. While mediation and arbitration are both referred to as “Alternative Dispute Resolution” processes, they are very different from each other. The following may assist you in deciding which conflict resolution method is best for your situation.
Mediation – all parties attend a meeting or meetings with an impartial third party who is the mediator. The mediator assists those in conflict to identify the issues and explore various options to settle the dispute. The mediator does not render a decision or force any participant to accept a settlement. Whether the case “settles” or not is up to the parties, not the mediator.
In Arbitration, the parties present their case to an arbitrator or an arbitration panel. Evidence is presented although it is often less formally than in a courtroom setting. The arbitrator’s role is to determine the facts, and apply the law to render a decision. The arbitrator will decide the outcome. Arbitrations can be “binding” so the parties can turn the award into a court judgment by a process called “confirmation”; or “non-binding”, meaning either party can disregard the opinion. People use the latter, at times, to obtain a reasoned result that may then bring the parties still closer to settlement.
Both mediation and arbitration are effective and useful dispute resolution methods. People who wish to use alternative forms of dispute resolution need to decide which method is best suited to their needs.
When the parties have an existing relationship that may continue after the dispute is resolved, then mediation is a very valuable tool. Since mediation allows the parties to control both the process and outcome, taking into account the relationship needs and other non-monetary issues are possible. Arbitration is private, confidential and efficient and it may “clear the decks” of a dispute that interferes with reasonable interpersonal functioning, but it is not built on enhanced communications as with a successful mediation.
In mediation, individuals can ask questions of the other side, and its experts or professionals to seek a better understanding of the issues and positions. Arbitration, by contrast, is geared towards the Arbitrator understanding and deciding the issue based on the relevant facts as presented by the parties. It involves single hearing where all of the evidence is presented for consideration. The end result is based entirely upon the arbitrator’s understanding of the events that occurred and his interpretation of applicable law. Source: Mediate.com