- Mediation is nonbinding while arbitration requires both parties to be bound by the arbitrator’s decision.
- The parties have more control in mediation while the arbitrator is the decision making party in an arbitration.
- Mediation resembles a negotiation or settlement while arbitration looks more like a court proceeding, minus the judge, rules of evidence, and the court room trappings.
- Parties often go to arbitration because a contract directs the parties to arbitration. If parties go to mediation, it is more likely to be voluntary, although many courts, require parties go to mediation before any litigation. Many family courts are mandating mediation.
Mediation is a type of negotiation where a third party, a mediator, helps the parties come to an agreement. The mediator’s suggestions are non-binding; the parties don’t have to accept the mediator’s suggestions and can in fact reject any proposals if they feel their own interests aren’t served. The mediator can meet with both parties at once or with each party separately. In contrast, arbitration involves a third party who listens to the case as presented by both parties. The arbitrator may be one person or a panel of persons. The parties sometimes choose the arbitrator and sometimes the arbitrator is chosen by a larger neutral third party. The arbitrator then makes a decision, which is binding on the parties. The arbitrator’s decision will be final unless the rules allow an appeal and both parties must abide by the arbitrator’s decision regardless of the outcome. Arbitration often looks like a judge deciding a case, except that the arbitrator doesn’t have to base his or her decision on law and the arbitrator’s decision is not a precedent for any future cases.