Mediation vs. Arbitration
The key legal differences between mediation & arbitration.
What is mediation?
What is arbitration?
How are they different in the law?
Definition of "Mediation:"
A mediation is the act of bringing together disputing parties to seek a third-party neutral advice and counsel to resolve a conflict. The mediation is non-binding, but is an effective platform to create consensus between plaintiffs, defendants or disputants.
Note: there are some jurisdictions (e.g. Texas) where mediation between two or more parties can be binding. Check with Settle the Dispute Group to see if your state’s mediation is binding or not.
Definition of "Arbitration:"
An arbitration is the act of bringing together disputing parties to seek an official and final decision to resolve a conflict.
Arbitration is a very important part of the law now: close to 20% of all legal cases get settled through arbitration.
The differences between mediation vs. arbitration:
Arbitrations are binding.
Mediations are non-binding. (Although sometimes states make mediation binding)
Both require a third-party neutral to evaluate and help resolve a conflict.
Settle the Dispute Group has attorneys, judges and third-party neutrals to help you resolve any dispute, lawsuits or conflicts that might be preventing you from enjoying your life. As trained experts in both mediation and arbitration, our team is here to help you resolve disputes through thoughtful, energetic and creative solutions.
Mediation vs. Arbitration: 5 Key Differences
So what are the key differences of mediation versus arbitration?
The finer points of conflict resolution may be Greek to you, but if you are involved in a dispute, it helps to know what all of your options are. Besides litigation, disputing parties can resolve their disagreements through arbitration or mediation. These methods differ in that:
1. Mediation Seeks Agreement; Arbitration Delivers Decisions
Mediation is essentially a formalized discussion process. Though mediation attorneys are trusted authorities in dispute resolution, and can often convince both parties to abide by their solutions, neither party is legally bound by the agreement. By contrast, arbitration is usually a legally binding process, though it is possible to enter into non-binding arbitration. Even if both parties decide later on that their arbitrator's decision is not in their interest, they still have to obey it or risk incurring penalties. The choice between mediation and arbitration thus depends on whether you and the other party can abide by an agreement without legal force behind it.
2. Arbitration Means Multiple Perspectives
In mediation, you and the other party agree to hire a single legal mediator to resolve the dispute. By contrast, most arbitration cases involve at least three arbitrators, all of whom have equal influence in the final decision. Typically, you and the other party will each choose one arbitrator, and those two arbitrators will proceed to elect a third; the three then make decisions by majority rule. The benefit of arbitration is that it provides multiple perspectives, minimizing the chance that the final decision will be biased or uninformed. On the other hand, the need for compromise often leads arbitrators to reach complex, confusing decisions. A single mediator can craft a simple agreement that is easy to understand.
3. Mediation is Often More Affordable Than Lawsuits
Mediation often looks more attractive to cash-strapped parties, especially those involved in expensive financial disputes and lawsuits. Mediators charge there will only be one mediator to pay, and the mediation process doesn't take as long, meaning that you won't have to miss as much work compared to being involved in a lengthy lawsuit. The lower cost of mediation, however, has to be weighed against the aforementioned fact that mediation agreements are non-binding. If you and the other party don't end up abiding by the agreement, you'll have to spend more money on a second round of mediation. The initial high cost of arbitration may thus save you more money in the long run, depending on how well you and the other party will be able to abide by a non-binding agreement.
4. Arbitration is a Formal Process
Although it is not as public as a court case, arbitration involves many of the same formal procedures. Arbitrators are usually lawyers, judges, or professionals from industries related to the dispute. Each party has a chance to present its case to the arbitrators as one would in court. The arbitrators then deliberate on the matter and present a decision to the parties. By contrast, mediators discuss the dispute with the two parties, allowing them to express themselves at any point and play a direct role in the decision. The two parties can proceed at their own pace and avoid unnecessary procedures and ceremonies.
5. Mediation is in-person with your counsel and the opposing parties
Though almost all legal matters involve some direct contact between the parties in dispute, only mediation relies primarily on having the two parties converse. When entering a mediation case, you and the other party must be able to look each other in the eye and speak frankly about the issue. You may find this easier if you feel uncomfortable with formal legal procedures and want to get directly to the heart of the matter, but it can also be emotionally difficult, especially during divorce cases. Make sure to take your own emotional and psychological wellbeing into account when deciding between mediation and arbitration.
Settle the Dispute Group is ranked #1 for mediation and arbitration. We settle disputes every day - from lawsuits, civil, commercial, to family matters such as divorce, trusts, wills and estates.
Settle the Dispute Group offers both mediation and arbitration services to resolve every manner of dispute. To settle your dispute with either mediation or arbitration, complete the form below.
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