Arbitration

Difference Between Arbitration and Mediation

To understand and properly differentiate between arbitration and mediation, we have to understand the term ‘arbitration and mediation’.

WHAT IS ARBITRATION?

Arbitration is a private procedure in which a dispute is submitted by one or more arbitrators who make a binding decision on the dispute in the conference room instead of courtrooms. An arbitrator is one who judges matters in arbitration, who might be an attorney, retired judge, or someone who has expertise in the field of the dispute.

WHAT IS MEDIATION?

Mediation is a process whereby the parties involved discuss their dispute with the aid of a third impartial person called the mediator who assists the parties to a settlement.

Below are key points that differentiate arbitration from mediation;

  • COST

Arbitration agreements are mostly signed by parties before any disruptions or disputes occur. They exist as a way to reduces litigation costs. The cost of obtaining an arbitrator can range from $10,000 and above.

 While mediation agreements exist also as a way of reduces the cost of litigation, they are known as the most inexpensive alternative dispute resolution process. They are more cost-effective than arbitration

  • TIME

Arbitration processes take less time usually a few weeks or months to resolve unlike litigation in the courtrooms which could take years.

While Mediation takes even lesser time to resolve unlike arbitration in the case that there is a settlement, if not the parties take their case to the courtroom.

  • PROCESS

Both parties agree before the meeting place, it can be a conference room, the facility of the mediator, or any institution of choice.

The procession of arbitration is similar to court cases where you have to build up your case with the aids of lawyers, pieces of evidence, and witnesses are presented.

While a mediator’s job is to initiate a process whereby the parties will confer themselves to a place of settlement or a win-win situation. A mediator may be an attorney but is restricted from using legal advice while in the role of a mediator. During the proceedings of a mediator, the afore agreed lawyers to both parties are present to confer on legal issues for their client.

  • PROCEDURE OF ELECTION

There are three ways in which arbitrators or a tribunal are chosen;

  • Directly by the disputing parties (in the case where there are three arbitrators, one party choose one arbitrator while the other party chooses the second arbitrator and the third is chosen by the two previously chosen arbitrators)
  • By existing tribunal members
  • By external parties (For example the court or individual or institutions as agreed by both parties

While mediators are chosen just based on the mutual agreement of the parties involved or as stated in the mediation agreement.

  • DECISION

The decision of an arbitrator is in most cases legally binding and accepted as final and cannot be changed in a courtroom except in exceptional cases like a fraud.

While a mediator is a facilitator who has no power to render a solution to the dispute or conflict.

See Also
Difference between Lawyer and Attorney