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Difference between Mediation and Arbitration
As Alternate Dispute Resolution (ADR) gains speed and popularity, it has begun to replace the traditional method of litigation and trial which were sought after methods of dispute resolution. The two most popular methods of Alternate Dispute Resolution are Mediation and Arbitration. While the underlying principle of ADR is open and honest communication between parties facilitated by a neutral third party – mediator or arbitrator, the role of the third party in a mediation differ from that in an arbitration process.
Mediation is a meeting between parties in an attempt to reach a settlement or agreement at the end of the session or multiple sessions, if required. The mediator is a neutral third party and does not get involved in the decision-making process as that is left to the parties themselves. So, in a mediation, the mediator merely facilitates healthy discourse while trying to encourage one party to give more than they think they should give and the other party to take less than they think they are entitled to receive[1]. The mediator cannot force a party, or parties, to settle the dispute and the mediation process is not usually binding so the parties have an option of referring the matter to trial or to an arbitrator if an agreement is not reached[2].
Arbitration is different from mediation, not in principle, but with respect to the role played by the arbitrator. An arbitrator has the power to make a decision for a parties based on the evidence produced before him and the perspectives put forth by the parties, and is this way the arbitrator has the power similar to that of a judge in a trial – this is reflected by the arbitration process itself[3]. The use of arbitration as opposed to a regular trial is attributed to the terms present in a contract between the parties, i.e., if an arbitration clause is present in the contract the parties will have no option but to refer the matter to arbitration in case a dispute arises. The terms of the contract must also specify the number of arbitrators, the rules and procedures that will apply to the arbitration, and the circumstances, if any, under which the parties may opt out of arbitration. Furthermore, unlike mediation, a decision by the arbitrator is usually binding and non-reversible, without the right to appeal.
In conclusion, mediation involves a single mediator while a panel of arbitrators can preside over an arbitration procedure, mediator merely facilitates discussion while the arbitration renders a decision on the matter, and mediation is non-binding while most arbitration decisions are binding[4].
[1] Editor, What is the Difference Between Mediation and Arbitration, JaburgWilk, (Apr. 9, 2020, 12:13 PM), http://www.jaburgwilk.com/news-publications/what-is-the-difference-between-mediation-and-arbitration.
[2] Editor, What is the Difference Between Arbitration and Mediation?, Singapore International Arbitration Centre, (Apr. 9, 2020, 12:16 PM), https://www.siac.org.sg/71-resources/frequently-asked-questions/174-what-is-the-difference-between-arbitration-and-mediation.
[3] Caruso, Arbitration v. Mediation, Pepperdine, (Apr. 9, 2020, 12:23 PM), https://onlinelaw.pepperdine.edu/mdr/arbitration-vs-mediation/.
[4] Editor, Arbitration Vs. Mediation, LawShelf, (Apr. 9, 2020, 12:34 PM), https://lawshelf.com/coursewarecontentview/arbitration-vs-mediation.
- Arbitration
- Mediation
- Alternate Dispute Resolution
