What’s the difference between mediation and arbitration?

Mediation and arbitration are both forms of alternative dispute resolution, meaning they are alternatives to resolving disputes through the formal legal system.

In mediation, the parties sit down together with a neutral third party whose role is to facilitate discussion. Mediation is flexible and allows for creative solutions. In the best cases, mediation is a collaborative process; the parties exchange information and work towards a solution. Because of its open and collaborative nature, mediation can preserve and even strengthen relationships.

The key difference between mediation and arbitration is that mediation offers the parties in a dispute control over the outcome of their conflict.

Arbitration is like a private trial, with the arbitrator acting as a private judge chosen by the parties. (If the parties can’t agree on an arbitrator, one side can ask the court to appoint an arbitrator.) An arbitrator’s judgment is binding like a court’s judgment and can be appealed only in very special circumstances. The arbitrator also has the power to decide costs. This means it can determine that one of the parties (usually the losing side) has to pay the other side’s legal costs as well as their own.

Arbitration is also more expensive than mediation. Arbitrators charge more for their time than mediators and legal costs tend to be higher because it takes lawyers longer to prepare for an arbitration than a mediation.

The advantage of arbitration over mediation is that there is an enforceable judgment and the dispute is over at the end of the process, whereas mediation can fail, leaving the parties without a resolution.

Jeanette Bicknell is a mediator with the Sadowski Resolutions Group. She can be reached at jbicknell@srgllp.com.