Arbitration Vs. Mediation

Terms:


The main difference between arbitration and mediation is a simple one: arbitrators hand down decisions, just as judges do, which can only be contested under certain circumstances. In other words, by agreeing to arbitration a party agrees to be bound by the arbitrator’s ruling, barring some exceptional deviation from the normal procedure.

The chart below highlights the basic differences between these two forms of dispute resolution. As we move through the arbitration chapter, many more differences will become clear.

MEDIATION

ARBITRATION

Can be voluntary or compulsory (court ordered)

Can be voluntary or compulsory (court ordered)

Trial is stayed (put on pause) pending outcome

Trial is replaced by arbitration

Generally involves a single mediator

There might be a single arbitrator or a panel of arbitrators

Mediators need not have any formal legal training

Arbitrators need not have any formal legal training

Choice of mediator often has an important effect on the settlement reached

Choice of arbitrator can be crucial, and especially in panel situations can lead to further litigation

Mediator’s function is to facilitate negotiation

Arbitrator’s function is to render a decision on the matter

Mediation ends when settlement is reached or when parties are deadlocked

Arbitration ends when the decision is handed down

Agreements to mediate are generally enforceable, requiring the parties to make a good faith effort to arrive at a settlement agreement

Agreements to arbitrate are generally enforceable, requiring the parties to accept the arbitrator’s decision as if it were a court decision .

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