Mediation vs Arbitration: What’s the Difference?

Like other professionals, lawyers sometimes fall into the trap of using jargon when communicating with non-lawyers. Common words like “complaint” or “discovery” can have very different meanings in a legal context; Latin expressions abound. For that reason, it’s crucial for attorneys to communicate clearly with their clients, in “plain English,” to ensure that the client understands the legal process and can make informed decisions.

A recurring misunderstanding involves two alternatives to the more “traditional” courtroom method of resolving disputes through a trial: the processes of mediation and arbitration.

Although similar in sound, these two processes are distinctly different. Arbitration resembles a court process where the “parties” present their cases to one or more decision-makers (the arbitrator, or a panel of them). After hearing the testimony and reviewing the evidence, the arbitrator has the power to issue a legally-binding decision.

In contrast, mediation is a less formal process that does not feature a judge-like figure. Instead, mediation can be better described as an intense negotiation process. The parties (and their attorneys, if any) meet in a private setting and confidentially negotiate a resolution to their issues. The mediator acts as a neutral third-party, helping the parties find common ground and construct a settlement agreement that is binding and enforceable by the court system. The mediator does not make any decisions; the only decision-makers are the parties themselves, and they all must agree. If no agreement is reached, the mediation is declared unsuccessful, and the case (presumably) heads to the courtroom. Ultimately the parties have a lot more control over the outcome of a mediation than over an arbitration.