How are mediation and litigation different?

On Behalf of | May 18, 2021 | Uncategorized |

Disputes may be inevitable in business, but ending up in court is not. Many business owners go well out of their way to avoid the courtroom, and with good reason. Court is not only an expensive headache, it can also ruin valuable relationships.

This is why alternative dispute resolution is very popular. Two main sources of dispute resolution are mediation and arbitration. According to Findlaw, mediation is typically a non-binding means of dispute resolution, while arbitration is binding.

The role of mediation

Mediation involves a single person bringing the feuding parties together to discuss the issue. The goal of mediation is for the parties to come to an amenable agreement of their own accord. The mediator guides the conversation between the parties, but does not issue a ruling in the way that a judge or an arbitrator does.

The non-binding nature of mediation means that if one or both parties are not satisfied with the results of mediation, there is still the option of going to court. The mediator has no final say in the dispute.

The role of arbitration

Arbitration is much more similar to a traditional courtroom. That is, typically the parties agree upon neutral arbitrators. The parties will present their cases to the arbitrators, and the arbitrators will issue a ruling. Arbitration is typically much faster and cheaper than going to court. It also allows the parties to choose the arbitrators, whereas there is no choice of judge in a court of law.

Arbitration is binding, in that the arbitrator’s ruling is the end of the dispute. It is often more difficult to overturn the decision of an arbitrator as compared to that of a judge.