What is the Difference Between Arbitration and Mediation

The main difference between arbitration and mediation is that in mediation, a mediator helps the parties involved to negotiate and come to a settlement that will please all the parties, whereas, in arbitration, the role of an arbitrator is more similar to that of a judge who decides the outcome of a dispute, focusing on the evidence available and law presented in arbitration.

Simply put, mediation does not involve a dispute, but arbitration does. Unlike in mediation, in arbitration, the parties involved have to agree to arbitrate and are bound to sign an arbitration agreement.

Key Areas Covered

1. What is Arbitration  
     – Definition, Features
2. What is Mediation
     – Definition, Features
3. Similarities – Arbitration and Mediation
     – Outline of Common Features
4. Difference Between Arbitration and Mediation
     – Comparison of Key Differences

Key Terms

Arbitration, Arbitrator, Mediation, Mediator 

What is Arbitration

Arbitration is a  process where an arbitrator or more than one arbitrator comes to a binding decision on an already submitted dispute. The parties who submit a dispute choose arbitration to resolve their disputes privately without going to court.

An arbitration is usually consensual, and therefore, this process can take place only if both the parties involved agree to it. The two parties also include an arbitration clause in the relevant contract regarding any future disputes that may arise. When an arbitration contract is made, one party involved does not have permission to withdraw from the arbitration unilaterally.

Arbitration is a neutral process, and the parties involved are allowed to choose the arbitrators of their choice considering their nationality and neutral factors such as the language, the venue of the arbitration, and the applicable law. This makes sure that no party gets any favors or partiality. Most significantly, arbitration is considered a confidential process where access to confidential information and trade secrets are restricted.

What is Mediation

Mediation refers to another private dispute resolution procedure. In mediation, a mediator who acts as a neutral third party usually assists the parties involved in the dispute to resolve it and come to a mutually acceptable solution.

During the process of mediation, the mediator neutrally listens to both parties. Through individual or joint sessions, the mediator will discuss and define the submitted issue,  understand both parties’ stances, and explore the available and acceptable resolution options. Furthermore, mediators guide and encourage the parties involved to come up with their own solutions. In mediation, the mediator does not make any decision on behalf of the parties and instead allows the parties to explore the options and settle on a friendly  resolution

Similarities Between Arbitration and Mediation

1. Mediation and arbitration are two private dispute resolution procedures.
2. Both arbitration and mediation do not involve any court procedures.
3. Third-party involvement happens in varying degrees within both these procedures.

Difference Between Arbitration and Mediation

Definition

Mediation is a process where a mediator helps the parties involved to negotiate and come to a friendly settlement. Arbitration, on the other hand, is a process where an arbitrator decides the outcome of a dispute, focusing on the evidence available and the law presented in arbitration.

Nature

The involvement of a mediator in resolution-making is quite narrow than the role of an arbitrator.

Resolution

During the process of mediation, the mediator encourages the parties involved to come up with their own solutions. On the other hand, in arbitration, the arbitrator comes to a binding decision on an already submitted dispute.

Conclusion

Mediation is a process where a mediator helps the parties to negotiate and come to a settlement that will please all the parties. On the other hand, in arbitration, an arbitrator decides the outcome of a dispute, focusing on the evidence available and the law presented in arbitration. Thus, this is the main difference between arbitration and mediation.

Reference:

1. “Arbitration Process.” Stewarts, 3 Nov. 2021.
2. “What Is Mediation?” Findlaw, 21 June 2016.

Image Courtesy:

1. “Arbitration concept with pawn figurines on table” By Marco Verch Professional Photographer (CC BY 2.0) via Flickr
2. “Mediation” By EpicTop10.com (CC BY 2.0) via Flickr