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Mediation vs. Arbitration: Know the Difference

Mediation vs. Arbitration: Know the Difference

mediation

Despite having a shared goal in mind – coming to a fair resolution – there are still quite a few key differences that parties should keep in mind when understanding mediation and arbitration. 

The main difference between mediation and arbitration is the process used to solve the issue and/or conflict. Both options lead to a resolution found outside of the traditional court process. 

  • Mediation: a non-binding process generally conducted with one mediator who facilitates discussion and resolution 
  • Arbitration: can be a binding or non-binding process that replaces the full process of a trial

Arbitration is similar in process to court but is generally cheaper, faster, and less formal than litigation. It is the formal alternative to litigation and allows two or more parties to select a neutral third-party, an arbitrator, to resolve the dispute at hand. Each side has the opportunity to present evidence, make arguments, and offer witness testimony. In binding arbitration, both parties agree to allow the arbitrator to decide the outcome of the dispute with no opportunity to go to court if one or both parties are dissatisfied with the outcome. In non-binding arbitration, the parties agree to allow the arbitrator to decide the outcome, however, retain the option of proceeding with the formal trial if they are dissatisfied with the outcome. Florida courts are authorized to refer parties to non-binding arbitration pursuant to Chapter 44 of the Florida Statutes. 

Mediation is a flexible alternative to arbitration in which a trained and neutral mediator facilitates the negotiations between parties, ultimately coming to a mutually acceptable solution. Mediation is a completely voluntary process meaning that either party can choose to stop at any time and is not binding until all parties reach and sign a settlement agreement. 

Advantages of Arbitration 

  • No right to discovery
  • Less expensive than a lawsuit
  • Can be completed within a few months 
  • Can hire an arbitrator with in-depth and technical knowledge 
  • Results in award that can become binding upon the parties

Advantages of Mediation

  • Inexpensive 
  • Settlement cannot be imposed upon the parties 
  • Parties are directly involved in negotiations
  • Proceedings conducted in private