Mediation vs. Arbitration: What's the Difference?

Alternative dispute resolution (ADR) such as arbitration and mediation has become increasingly popular. Learn about what sets these two methods apart.

Mediation vs. Arbitration: What's the Difference?

Litigation is generally something that 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 sure of the outcome. Because of this, alternative dispute resolution (ADR) such as arbitration and mediation has become increasingly popular. But what is the difference between these two methods?Both arbitration and mediation employ a neutral third party to oversee the process, and both can be binding.

The main difference between the two is the process used to resolve the conflict. Mediation has enjoyed increasing popularity as an important part of the litigation process. For example, in Florida, almost all lawsuits are required to be mediated before a court allows them to be included in the trial schedule. The reasoning behind this requirement, according to the Florida Senate, is because mediation has proven effective in reducing court files and trials, and offers a more efficient and cost-effective option than litigation. Mediation has such high success rates because the parties meet in an environment where they can freely and confidentially present their position to a neutral third party.

Mediation tries to limit problems and put them in the right perspective. Participants tend to feel much better after having the opportunity to let off some steam and also benefit from hearing the other party's point of view. The neutrality and more relaxed environment of mediation can eliminate the desire to continue hostile litigation once both parties have seen all issues fairly. Mediation can be used for any type of controversy; there is no need to wait until a dispute results in a lawsuit and a judge submits it to mediation. Pre-lawsuit mediation is increasingly accepted as a sensible way to resolve disputes before they become litigation. In addition to being confidential and non-binding, mediation is relatively quick and inexpensive compared to litigating a dispute.

Keep in mind that while most certified mediators are lawyers, mediators will not provide legal advice during mediation and should not draw legal conclusions about the merits of any party's position. When the parties reach a final agreement, the parties themselves will put the agreement in writing and sign it so that it later becomes a binding contract. Arbitration is another form of ADR that is similar to mediation but with some key differences. Arbitration is also overseen by a neutral third party who hears evidence presented by both parties and makes legal judgments based on that evidence. The arbitrator then issues an arbitration award which can be filed as a judgment in accordance with either an agreement between the parties or state laws.

Arbitrations can be binding or non-binding depending on what was agreed upon by both parties. Before your litigation progresses, work with your lawyer to determine if mediation or arbitration is right for your case. Contact a qualified lawyer to represent your interests in mediating or arbitrating your dispute. Without a doubt, mediation should almost always be the first step in resolving a dispute. If you decide to use the binding mediation process, ensure that the mediator has the necessary technical and substantive knowledge to be able to make a fair and equitable decision if asked to make that final and binding decision.