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What is the difference between mediation and arbitration?

On Behalf of | Aug 14, 2024 | Mediation Services

Mediation and arbitration are methods used to resolve disputes outside of the court. While both allow conflict resolution without litigation, they differ in achieving an agreement between two parties. Below are some of the critical differences between the two.

Binding or non-binding

Both mediation and arbitration can be binding or non-binding, depending on the circumstances of the case. Mediation is usually non-binding unless the parties enter into a settlement agreement that formalizes their agreement, which can then be enforceable as a contract. Parties can also get a court to review and approve the mediation settlement agreement, in which case, it becomes legally binding.

Meanwhile, whether arbitration is binding will depend on the contract, terms of service or verbal agreement between the two parties. Most parties choose to have binding arbitration agreements.

Both mediation and arbitration involve neutral third parties. In mediation, this person acts as a facilitator to help parties reach a mutually acceptable solution. In arbitration, the arbitrator acts more like a judge, making decisions after considering the evidence and arguments.

Collaboration vs non-collaboration

Mediation is a process of two-way communication. The mediator often facilitates the two parties to an amicable agreement by helping them see each other’s points of view or helping them to make concessions they would not have made otherwise. Mediation makes both parties feel involved and in control of their case’s outcome, which makes mediation highly successful.

Meanwhile, arbitration is often adversarial and works similarly to litigation in that both parties present their arguments to the arbitrator, who will decide based on the facts and evidence presented.

Both are less expensive than litigation

Mediation and arbitration are generally cheaper than litigation because they take less time to reach an agreement or decision. If you are involved in a family or civil dispute, it may be advisable to consider mediation to resolve your case. Your situation may benefit from hearing the other side’s point of view, which can help you save on costs, too.