How does mediation and arbitration differ?

Alternative Dispute Resolution (ADR) is any means of resolving a dispute without litigation.  The two most common types of ADR are mediation and arbitration.

Mediation is a process through which the parties meet with a neutral third party and negotiate.  The neutral third party is known as a mediator.  Unlike a judge, a mediator does not hear both arguments and make a decision.  A mediator helps the parties to see both sides of the argument and allows them to find a solution on their own.  Mediators are typically trained to facilitate these negotiations, so their input can be helpful.  However, the decision is ultimately left to the parties.  They can agree on a settlement or proceed with litigation.

On the other hand, arbitration is more like a hybrid of mediation and litigation.  Like mediation, arbitration involves the help of a neutral third party.  This neutral third party is known as the arbitrator.  Like a judge, the arbitrator allows the parties to make their arguments and present some evidence.  After both sides have finished, the arbitrator renders a decision in favor of one party.  If the arbitration is binding, then the arbitrator’s decision usually carries the same weight as a judgment.  If the arbitration is not binding, the parties may proceed with litigation or additional ADR.

Mediation is usually less expensive than arbitration, but both are generally less expensive than litigation.  While litigation may take years, mediation and arbitration do not typically take more than a few days.  Unless you are subject to binding arbitration, mediation and arbitration generally have the same effect, in that the parties are free to disregard the proposed solutions.

If you are considering mediation or arbitration, OC Dispute Resolution Services can help.  Give us a call today at (714) 505-5655 or visit us online at www.ocdispute.com.

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