Category: ADR

What’s the difference between mediation and arbitration?

Arbitration and mediation are very different.   Although they are both examples of alternative dispute resolution in that the parties are taking their dispute to a forum other than a court, they are dissimilar in many respects. During a mediation a neutral party helps the parties negotiate with each other to reach an agreement that will end their dispute.  In an arbitration, a neutral party acts as a judge and decides which side should prevail. For example, let’s say Patrick and David have a contract.  Patrick accuses David of breaking the contract.  In a mediation, another person, let’s call her Nancy, will help Patrick and David discuss the issue and  reach a settlement that will end the argument. In an arbitration, another person, we’ll call him Ned, will decide whether Patrick’s accusation against David has merit or not.   Assuming Ned decides that David broke the contract, Ned could award Patrick a damages award – – meaning David will have to pay Patrick. One similarity that mediations and arbitrations share is that, generally speaking, they are private and confidential.  Unlike disputes in court which are public, parties can mediate and arbitrate without disclosing anything to the...

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Are mediation and arbitration the same?

No, they are very different. Both mediation and arbitration are examples of alternative dispute resolution, or ADR, meaning both are alternatives to resolving a case through the court system.  But they are two very different alternatives to the courts. A useful way to describe mediation is as “assisted negotiation”.  A neutral person will help the disputing parties voluntarily resolve their dispute through discussions.  Mediators use different techniques to help parties reach a compromise.  If the mediation is successful, the parties won’t sue each other and will agree to end their dispute.  Typically one party will agree to compensate the other party. A useful way to describe arbitration is “private justice”.  In an arbitration one or more arbitrators will act as a judge and jury to decide the outcome of a dispute.  Instead of suing in court, the parties will bring their claims against each other in a private proceeding.  Arbitrations are usually confidential, as opposed to court proceedings, which are usually entirely public.  Unlike a mediation, the parties are not trying to resolve their argument through negotiations, they are trying to win by proving or disproving liability. Many contracts include provisions that require the parties to arbitrate.   These provisions are known as “arbitration clauses.”  The arbitration clause will state that in the event of a dispute, the parties agree to not sue in court but instead to initiate...

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