What is the difference between mediation and arbitration?

Mediation and arbitration may or may not be binding, depending on the dispute resolution clause or contract agreed upon between the parties. In most cases, mediation is not binding. Both must use a neutral third party who has no personal interest in the case.

Furthermore, in mediation, the mediator does not judge the case. Instead, the mediator helps the parties negotiate a solution to the issue and eventually come to an agreement. Often, the parties or their lawyers will then put their agreement down in writing that both parties sign.

On the other hand, with arbitration, the arbitrator may act as the judge by making decisions about evidence and giving written opinions. Those opinions may or may not be binding. Other differences include the following:

  • Arbitration may be decided by a panel of arbitrators or a single arbitrator. If a case goes to mediation, there is generally just one mediator.
  • An arbitrator may render a decision on the matter, while a mediator facilitates a negotiation.
  • Arbitration ends when the arbitrator hands down a decision. Mediation ends when the parties reach a settlement or an impasse.
  • A court trial and judgment may be substituted by binding arbitration. Generally, with mediation, the trial is stayed pending the outcome of the mediation.

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