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What is the difference between mediation and arbitration?

On Behalf of | Dec 6, 2023 | Alternative Dispute Resolution

Disputes and conflicts sometimes lead to litigation. If the parties involved cannot agree with one another, they may want the courts to intervene. However, it can be very frustrating to wait to have a hearing in civil court.

Many parties embroiled in a conflict will look for a faster solution. Alternative dispute resolution is a way to speed up the process of resolving a dispute between two parties. The most common types of alternative dispute resolution are mediation and arbitration.

The role of the third party is the primary difference

The reason why mediation and arbitration are such powerful tools for conflict resolution is that people must work with a neutral third party. Someone who does not have direct loyalty to either party involved in the dispute can potentially provide a neutral opinion about the best way to resolve the issue.

During mediation, the neutral third party or mediator helps facilitate communication. They ask questions and review the conflict with the parties involved to help them find a way to compromise and resolve their disagreement.

During arbitration, the third party holds a role more similar to that of a judge. An arbitrator will hear both sides of the conflict and then enter a decision that they believe reflects what is reasonable and appropriate given the unique details of the situation.

Arbitration can be binding, meaning that the determination is effective regardless of how the parties feel. It can also be a starting point for future negotiations. Mediation typically requires that the parties reach an agreement and sign a document together affirming a specific settlement.

Both mediation and arbitration can potentially facilitate a meaningful compromise and an appropriate solution to a dispute. Exploring alternative dispute resolution may help people more effectively resolve a disagreement without risking an all-or-nothing litigation outcome.