Mediation and Arbitration: Both ADR, but Not the Same

Mediation and ArbitrationThe lines between mediation and arbitration continue to blur.  Though the practices are both forms of resolving disputes through alternative methods to litigation, they are fundamentally different.  Determining which form of ADR is right for your situation requires an understanding of the differences between the two practices.

Arbitration provides a simpler, quicker method for solving a dispute that would otherwise be settled through litigation.  A neutral third party, called the arbitrator, hears arguments from each side of the dispute and levies a ruling.  The ruling is in favor of one party or the other.  Some arbitration is binding, while others have the option of continuing on to litigation if the outcome is not satisfactory to one or both parties.

Mediation, too, is simpler and quicker than litigation, but that is where the similarities end.  Mediation allows the disputing parties to create their own resolution.  A neutral third party participates, but has no say in the final outcome, other than to help the parties determine if that outcome is legal.  Mediators facilitate discussion between the disputing parties and encourage them to find common ground.  Mediation is only successful if both sides of a dispute are satisfied with the outcome and is not binding until this occurs.

 

There are three main fundamental differences between mediation and arbitration. 

Arbitration is adversarial, which means the goal of each party is to win and cause their opponent to lose.  Mediation, on the other hand, is non-adversarial.  The goal is not to win, but to reach a resolution that satisfies everyone.

The role of the neutral third-party is also different.  In arbitration, the third-party is responsible for levying the final outcome and the parties may or may not be required to accept that outcome as legally binding.  In mediation, the third party is not in control of the final outcome, but instead guides disputing party through the process of resolving the issue at hand.

Finally, the skills and expertise of the neutral third party vary between arbitration and mediation.  In arbitration, it is important for the third party to have expertise in the issue at hand.  For instance, if the dispute relates to a business contract, the arbitrator should be an expert in contract law.  On the other hand, in mediation, it is most important the third party be an expert in communication and be able to offer creative approaches to resolving conflict.  Knowledge about the subject matter is helpful, but not necessary.

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