What Are the Differences between Mediation and Arbitration

Disagreements may arise between parties who are in contracts with each other. When a contract dispute surfaces, the parties need to work through their problem to come to a resolution. Sometimes, the parties need assistance in resolving their dispute. This can be done through various methods, including mediation and arbitration. While they are similar, there are several differences between mediation and arbitration.

Arbitration is Like Going to Court

Arbitration is similar to the court process.  Witnesses testify and present evidence to a neutral arbitrator.  The formality of these proceedings vary and is based on the agency conducting the arbitration and the rules for the arbitration.  The arbitrator decides the issues and makes a final ruling.  In most circumstances, the ruling of the arbitrator is binding absent an appeal to the court of review.

Mediation Can Help Facilitate Resolution

Mediation is a process of dispute resolution that is conducted by a mediator. The parties meet with the mediator, who is an objective professional.  The parties are encouraged to discuss the issues that are in dispute.  Unlike an arbitrator, a mediator does not weigh evidence and determine the prevailing party.  Rather, the mediator attempts to guide the parties to make compromises and come to an agreement that suits both of them.  If the parties do mediate an agreement, it is also likely binding on the parties.

Arbitration May Be Required by Contract

Arbitration  is generally part of a contract requirement. Parties in dispute must enter into arbitration in order to fulfill the contract terms.  In many instances, arbitration clauses are put into contracts to keep parties from expensive litigation. In other words, arbitration is done instead of going to court.

Mediation May Keep Cases Out of Court

Parties typically communicate and negotiate before the case progresses to trial. When no agreement is forthcoming, the case heads to court.  Before getting to court, the parties may want to try mediation.  Mediation allows the parties to openly discuss the issues in a safe setting.  Conversations are confidential.  If an agreement is reached, it can be put into writing so that it becomes binding.

Arbitrators Often Work in Teams

Teams of arbitrators are usually selected to work together. For example, each party may select an arbitrator, and those two arbitrators choose a third.  This allows for a professional and unbiased panel of experts to review your situation and listen to your arguments.  While arbitrators often work in teams, they may work alone as well.  Mediators, on the other hand, generally work alone.

Resolving Difficult Disagreements in Contracts

Contract disputes happen frequently.  The first step in resolving a problem is to understand exactly what it is.  Have your attorney review the contract to determine exactly what went wrong.  Your lawyer will work to negotiate a resolution.  If necessary, arbitration or mediation may be a possibility.  If you are involved in a contract disagreement, contact the experienced lawyers at Udall Shumway PLC to schedule a consultation to discuss the details of your case.

 

This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice regarding Differences between Mediation and Arbitration, or any other commercial litigation matters, please feel free to contact Joel E. Sannes at 480.461.5307, or log on to udallshumway.com,  or contact an attorney in your area. Udall Shumway PLC is located in Mesa, Arizona and is a full service law firm. We assist Individuals, families, businesses, schools and municipalities in Mesa and the Phoenix/East Valley.