Legal

Difference between Arbitration and Mediation

Main difference

Arbitration is also called ADR (alternative dispute resolution) when conflicts or disputes are resolved out of court. While mediation can be referred to as assisted negotiation and communication between two parties to reach a certain agreement. Arbitrations are considered consensual, meaning that they only take place when both parties agree. Also, both arbitration and mediation are used in conjunction with the litigation process where either party can communicate and do their best, and when that fails, the next step is to go to trial. If we consider mediation, it is a non-binding process while arbitration is a binding process. Arbitration involves one or multiple arbitrators/arbitrators panel while on the other hand, in mediation there is a participation of a single mediator. So, when the decision is made in the presence of multiple arbitrators, it is made on the basis of the vote and in the situation where there is a mediator, the resolution is made on the facts through communication and negotiation. Furthermore, arbitration is like a less formal court but more formal than the mediation process as the arbitrator can be a professional engineer etc. or you can be a retired judge or even a senior attorney. And the parties present their cases out of court and in the end the arbitrator has the power to issue a binding legal decision which they must follow and if not, can be enforced. Whereas in mediation the negotiation process is manage much more informally and flexibly with the help of the mediator. Here, the dispute is discussed with the parties and discussed a million times between them until, unless a mutual decision is reached, and once it has been, the parties usually make a written statement about it. In short, the role of the mediator is to facilitate discussion or negotiation while the arbitrator makes a decision. In addition, mediation is cost effective, more efficient and reduces trials. Although arbitration is an expensive process, it is mostly inefficient, slow and less reliable. more efficient and reduces rehearsals. Although arbitration is an expensive process, it is mostly inefficient, slow and less reliable. more efficient and reduces rehearsals. Although arbitration is an expensive process, it is mostly inefficient, slow and less reliable.

Comparison chart

Arbitration Mediation
Definition When some parties have a dispute, it is handed over to an arbitrator who may be a retired judge. It is a very simple and informal process where the assisted negotiation is carried out for a certain agreement.
Job Can be done voluntarily and compulsively Always done voluntarily
Decision The parties to the arbitration must agree with the decision made by the arbitrator. The decision is made collectively and collaboratively with the help of the mediator.

Arbitration Definition

When some parties have a dispute, it is passed to an arbitrator who can be a retired judge or senior lawyer, etc., who then gives a binding decision that they must follow. It is a less formal process but not completely informal. The arbitration is consensual and the parties have the option of choosing their only arbitrators, that is, there may be a total of more than one arbitrator. The entire arbitration process is confidential and conducted in a neutral manner.

Definition of mediation

It is a very simple and informal process where the assisted negotiation is carried out for a certain agreement. It is voluntary that the parties can leave whenever they want, regardless of the reason. In addition, it is a negotiation that is done collaboratively, since no one can impose decisions on anyone. The participants have the authority to make decisions, but only through negotiation, since nothing can be imposed, but in the end the decisions made are satisfactory and informed since an equal participation is taken. And it is the role of the mediator to make sure that agreements are reached in an informed manner, so that in the end no fact is unknown. Also, the mediator here is a unique mediator who is balanced, neutral, confident, and unbiased.

Differences in a nutshell

  1. Arbitration can be done on a voluntary and mandatory basis; mediation is done voluntarily.
  2. Formal process to reach a decision; mediation is by no means a formal process.
  3. There may be one or a panel of arbitrators; mediation includes only one mediator;
  4. The parties to the arbitration must agree with the decision made by the arbitrator when the matter is delivered to him; In mediation, the decision is made collectively and collaboratively with the help of the mediator.
  5. The mediator has the role of facilitating the negotiation process while the arbitrator makes a decision on the matter.
  6. The person who is the arbitrator must have experience and legal training while a mediator is not necessary.
  7. The decision made by the arbitrator can be material and has the potential to lead to further litigation in the case of a panel; Mediation is the process in which the mediator chosen by the parties usually has a significant impact on the final decision.

Final Thought

We all know what mediation is, even if we don’t know the exact meaning of the term, another one that is silently related to what is known as Arbitration. Both of them have been discussed about it in the article so that people have a better idea of ​​what they mean and what are the key differences between them.

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