What is “mediation”? What is “arbitration”?

“Mediation” and “arbitration” are two processes by which people can settle a dispute without having to take on the burden and expense of a trial. Although both mediation and arbitration feature a neutral third party who works with the parties to the dispute, they differ in several important ways.

Mediation

In mediation, the parties to a dispute work with a neutral third party known as a mediator. The mediator is often chosen by consent of all the parties together and agrees not to take anyone’s side in the dispute.

The role of the mediator is to help the parties reach a decision or settlement that everyone can agree upon. In order to do this, the mediator works to help the parties reach a “middle ground,” often by gathering information from both parties and speaking to the parties alone or together. Although mediators do not usually share their opinion of a dispute, some parties choose “evaluative mediation,” which allows the mediator to weigh in on the situation as well as to help the parties resolve it..

Mediation is nearly always cheaper than litigation, especially for relatively minor disputes. Therefore, judges frequently require the parties in personal injury and other torts cases to go through mediation before going to trial. Often, parties can avoid a time-consuming and expensive trial process by resolving their differences in mediation. Even if mediation can’t solve every problem, it may resolve some minor disputes related to the main dispute. In this case, parties can then focus their time, energy and money at trial solely on the disputes they were unable to resolve during mediation.

Decisions made in mediation are not legally binding unless the parties agree to be legally bound by the decisions. Instead of focusing on making a legal decision, mediation focuses on helping the parties reach compromises and agreements. Some cases, like family law disputes and some personal injury cases, can be solved by mediation. Cases like criminal charges, however, can only be resolved by the courts.

Mediators are usually trained and certified in mediation. Many attorneys and judges are certified as mediators, as are some social workers and professionals in similar fields. Usually, however, mediators are not specialists in any particular technical field, as are some arbitrators.

Arbitration

Like mediation, arbitration is a form of alternative dispute resolution in which the parties work with a neutral third person – the arbitrator – instead of, or before, going to trial. However, mediation and arbitration also differ.

In arbitration, the parties choose to present their case to a neutral third party – the arbitrator – and agree to be bound by the arbitrator’s decision. Rather than working as a “go-between” to help parties resolve their problems, the arbitrator acts more like a judge, hearing the details of the dispute and then issuing a decision on it.

Like mediation, arbitration is not appropriate for all cases. However, arbitration often occurs in the business and technical fields, where disputes can often be settled more quickly and cheaply by an arbitrator than they can in court. In addition, arbitrators often have a specialized technical knowledge that makes it easier for them to solve disputes that involve highly technical or complex details, such as intellectual property cases.

Parties may enter both mediation and arbitration voluntarily. In some cases, courts will require parties to attempt mediation before bringing the case to court. On the other hand, arbitration is always assumed to be voluntary. “Mandatory” arbitration only occurs in cases in which the parties have agreed in a contract to take any disputes to arbitration instead of, or before, taking them to the courts. If the parties have such a contract, the courts may require them to go through arbitration before filing a lawsuit.

Usually, once the arbitrator issues a binding arbitration decision, the matter is settled. Often, however, a contract between two parties requiring them to arbitrate will also include language allowing the losing party at arbitration to appeal the decision in court. An appeal from an arbitration award often acts just like a lawsuit, with the parties going through an additional discovery process before taking the case to trial.