People often ask me what the difference is between mediation and arbitration. Both are among the most common forms of alternative dispute resolution. These “alternatives” avoid the more expensive and time-consuming method of resolving disputes in court.
Mediation is an informal proceeding in which a third party neutral, the mediator, works with the parties, and their attorneys if they have them, to facilitate a settlement of the dispute. The mediator does not make any decisions about the case. The proceeding involves a LOT of conversation, with most of the time spent caucusing with the parties in different rooms. A considerable amount of “shuttle diplomacy” is required, but often the parties’ participation in joint sessions is surprisingly valuable. The idea is to create an environment and focus the issues in a way that encourages the parties to develop a mutually acceptable settlement. In mediation, the parties control the solution to the dispute.
Arbitration is more like an informal “mini-trial,” and is subject to rules that are similar to, but much simpler than, traditional court trial rules. The presentations are typically shorter, and evidence can be submitted through witness testimony, documents, and other witness’ written statements. The role played by the arbitrator is more like that of a judge because after the parties’ or lawyers’ presentations, the arbitrator makes a decision and renders an award. The benefit of arbitration is to minimize the expense of a formal court trial. Arbitration can be binding or non-binding. If it is binding, then once the award is made, the dispute is over without worrying about an appeal. If it is non-binding, the decision of a third party neutral, the arbitrator, is often considered a very valuable factor in settlement negotiations.
Every case is different, but every case is a good candidate for some form of alternative dispute resolution.