Do you know the differences between mediation and arbitration? Both are considered to be alternative dispute resolutions or (ADR). ADRs are avenues of resolution that are outside of the formal court and litigation process.
Before entering into either mediation or arbitration you should understand the implications, benefits, and consequences of doing so. Both mediation and arbitration can be more private, cost-effective, and time-efficient tools. Going through the court processes and trials will cost more and require more time than you think. Mediation is a non-binding, collaborative process between both parties and a neutral mediator. On the other hand, arbitration is typically a binding process that will replace a trial by judge or jury. Additionally, arbitration is usually done utilizing an arbitration panel (typically three members) whereas mediation is customarily conducted by a single mediator.
Mediation is a process that you will have some control and input over. For example, you may be able to help outline the terms of the resolution. A mediator helps facilitate effective communication and compromise between the parties. If mediation is unsuccessful, the parties can continue to move forward with formal litigation and ultimately take their case to trial. Mediation is also a confidential process. Meaning, if you discuss something with the mediator, they will not disclose it to the other side absent your permission. Currently, mediation is becoming more and more popular as an alternative to formal litigation.
Arbitration, on the other hand, is a fact-finding process that will most likely replace formal litigation as the Arbitration has the power to render a legally binding outcome. It is also a more formal process than mediation. It is binding and you will not have a say in the outcome. Arbitration does tend to save money and time for those involved. However, often you are entered into the arbitration process before a conflict has arisen. This often includes contractual disputes, collection accounts, financial matters, employment claims and may include medical malpractice cases. Often, arbitration agreements or clauses are contained inside a larger contract, like a banking contract, service contract, real-estate contract or even in an agreement to treat such as your initial medical records. As such, I implore you to always read an entire document before signing it.