How are mediation and arbitration different?

On Behalf of | Oct 25, 2022 | Contract Disputes |

It is important to understand that litigation is not the only option when it comes to handling contract disputes. In fact, it is usually better to avoid litigation if at all possible. Litigation can be expensive, ruin valuable relationships and be time consuming.

Popular alternatives to litigation include arbitration and mediation. However, both of these approaches have a variety of pros and cons. According to FindLaw, arbitration is more similar to litigation as compared to mediation.

Understanding mediation

Mediation is, in general, a non-binding process. This means that, after the mediation, if one party is not happy with the output, they can still take the matter to court. The goal of mediation is for a trained mediator to help guide the parties to an acceptable conclusion without the need to bring in the law.

Mediation is a good way to work out a solution through compromise. Usually, mediated solutions help retain positive relationships between both parties.

Understanding arbitration

Arbitration is more similar to litigation, in that there is usually a panel of “arbitrators” that act the same way that a judge does. Usually one party chooses one arbitrator, the other the second and then both parties agree upon a third. The parties will present their cases, very similar to litigation. Then, the arbitrators decide the outcome.

In most cases, arbitration is legally-binding. In fact, it can be more difficult to overturn the output of arbitration as compared to litigation.

In most cases, disputes do not need to go to court. Looking for alternative dispute resolution methods can help save time, money and relationships.

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