Arbitration and mediation sound a lot alike to most people, but they are not the same. In the legal world, arbitration and mediation come about when there is some type of an impasse that has led to the two parties to turn to the courts system.
In response, both mediation and arbitration are either entirely voluntary or are court-ordered. This is where the two hit their first and perhaps most significant differentiation. Where mediation is concerned, the parties are to work out a settlement, but if they cannot they could end up back in court.
Where arbitration is concerned, once the court turns the parties out into arbitration, it means they are not returning to court. Arbitration replaces trial.
Arbitration may involve just one arbitrator or a whole panel of arbitrators. The arbitrators are not necessarily trained legal professionals. While arbitration replaces trial, it could lead to further litigation.
Arbitrators’ entire goal in arbitration is to make a decision. Arbitration officially ends when the arbitrators hand down a decision. The potential risk for parties involved in a court battle is that the arbitrators’ decision is as good as a court decision. What this means is that arbitrations’ decision holds just like a court decision would.
Mediation, on the other hand, is voluntary, and it marks a stay in the trial and does not replace it. In general, there is one mediator and no panel of mediators. Mediators do not necessarily have legal training either. Though, similar to a judge’s decision, different mediators will have different styles of decision making, and it will tend to impact the negotiations and resulting settlement.
Mediators are a specialized profession, though, and are tasked with working to mediate negotiations among the parties. Their function is technically to support the parties in coming to an agreement. That is where their specialized training comes into play.
For instance, when the two parties are set before a mediator, they generally will ask one main question. That question is to ask what each party wants. The idea is that neither party wants the same thing.
Their emotions are heightened and for that reason they may start off defiant and unready to make any agreements. Once they are re-focused on what they want, they begin to work together to make some agreements.
One of the agreements could even be to agree to disagree. It removes the emotional charge and pressure that either side must feel forced to get along. They do not have to do that in mediation. It is understood that they are in a disagreement, and stating it helps the parties move along into the negotiation process.
From there, the mediator works to give the parties the chance to talk about what it is they want. In all likelihood, they do not want exactly the same thing. The idea is simply that often there is a way to come to a halfway point where each party gets a part of the whole.
That is the main difference between arbitration and mediation — that one replaces court, and the other is a stay from court.