Arbitration vs. Mediation

ARBITRATION AND MEDIATION – WHAT ARE THEY AND HOW DO THEY DIFFER?

Although both arbitration and mediation fall under the umbrella of “alternative dispute resolution,” other than the fact that they constitute alternatives to court-based litigation, the differences between the two disciplines are substantial.  Here are two good working definitions:

“Arbitration” is a process similar to a traditional court proceeding.  It is different, however, in that the parties hire a single arbitrator or a panel of three arbitrators to hear and decide their case.  In many respects, arbitration is much like engaging the services of a private judge.  Because arbitrators are not burdened with an out-of-control case load that most courts encounter, they are better suited to focusing on a single case or just a few cases and moving the process along much faster than a court.

It is significant that arbitrators generally have far more actual authority than a judge in placing restrictions on the scope of a litigation because they can impose reasonable limits on the extensive and expensive document discovery, depositions and motions which have become the bane of a typical court-based lawsuit.  More often than not, it takes years before a case gets to trial in court.  In arbitration, on the other hand, most cases are heard within a matter of months, even weeks in less complicated disputes.  While it may seem that going to court gets the parties a “free” judge, in a well-administered arbitration, the benefits of speed and efficiency in resolving disputes generally outweigh the filing of a case in court and saves substantial legal fees.  Following a hearing, the arbitrator makes a decision and, with few exceptions, the case is concluded and not subject to further expensive and lengthy appeals.

“Mediation” differs from arbitration in that it is a voluntary, non-binding process in which an impartial third party (the mediator) assists two or more parties to a dispute in identifying issues between them that require resolution and then aids the parties in the development of mutually acceptable proposals to resolve those issues in order to reach an agreement.  Unlike an arbitrator who the parties engage to impose a resolution, the mediator is without any authority to decide the outcome of the dispute.  Instead, the mediator’s role is to aid the parties in finding a mutually agreeable settlement to their dispute without any preference for what the terms of settlement may be.  The mediation process can start before a case ever gets to court or at any time during or after a court proceeding.  Experience has shown that even in the thorniest of seemingly intractable legal disputes, a well qualified mediator can help bring about a resolution which will keep the parties out of court, or get them out if they are already there