What is the difference between arbitration and mediation?
Arbitration: you hire a private judge in a private courtroom. Mediation: you hire a skilled neutral negotiator to help both sides agree a settlement.
Arbitration is like having a private judge. The arbitrator considers the matter and makes a ruling which is binding on the parties. The parties agree in advance to be bound by the arbitrator’s ruling.
A mediator does not impose a judgement on the parties. A mediator manages a structured negotiation process to help the two sides reach a settlement voluntarily.
The advantage of arbitration over going to court (“litigation”) is that the proceedings can be kept private, and can sometimes be concluded more quickly than using the local court service. It is usually just as expensive, or even more expensive, than litigation, though.
Mediation is usually much less expensive than both arbitration and litigation. The two sides do not need to do as much preparation work as they do for arbitration and litigation. For litigation and arbitration, you have just one opportunity to present your case. You will need witness statements and expert evidence prepared. You will need to explore every possible legal argument. You will need to prepare responses to everything the other side throws at you.
In mediation, you still need to be well prepared for the day, but you do not need to do quite as much preparation as you would for a one-shot, no-second-chances event like an arbitration or mediation. So your legal costs will be a lot lower, as your legal team will not have to spend as much time preparing your case as they would for a trial or an arbitration.
I am an accredited commercial mediator, not an arbitrator. To find out more about my services, please explore my website.
