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What’s the difference between arbitration and mediation?

On Behalf of | Mar 27, 2023 | Business Consulting & Advice |

While running your own business can be rewarding, it’s inevitable that you are going to face challenges at some point. Some of these challenges may come with a summons to appear in court. 

Typically, going through the court system is a last resort, and there are cheaper and more efficient dispute resolution processes out there. Two alternatives to litigation you may have heard of are arbitration and mediation. Often, these terms are used interchangeably, but they are actually very different procedures. 

What are the key differences between arbitration and mediation

Formal vs. informal

In some ways, arbitration is similar to a court hearing but on a much smaller scale. The process will still largely be controlled by attorneys and the arbitrator. Sometimes, arbitration may even take place in a room that resembles a court. Mediation, on the other hand, aims to foster a much different environment. The process is designed to be less formal so that participants feel at ease and encouraged to engage, which takes us to the next point. 

Levels of participation 

In arbitration, attorneys argue their cases and an arbitrator comes to a legally binding ruling based on the facts. As you can see, this is actually quite similar to a court case. In mediation, the role of the participants is much less passive. The mediator is merely there to encourage negotiations and constructive conversations, with the ultimate aim of achieving a fair compromise between the parties. Both parties to the dispute will be actively encouraged to address issues on their own, with the mediator playing the role of facilitator 

Whether you are facing a potential lawsuit, find out if mediation or arbitration may work for you. It can help save you time and money. We help businesses who are facing legal disputes. Contact us for a consultation.