Many people – even some attorneys – don’t fully understand the differences between arbitration and mediation, which fall under the broad category of Alternative Dispute Resolution (“ADR”). This introduction will provide an explanation of the differences.

Binding Arbitration

Either a sole arbitrator or a panel of three arbitrators, selected by the attorneys for the parties engaged in a dispute, will act much like judges at a conventional nonjury trial where they hear the evidence of both sides and issue a ruling, which is binding. The ruling in binding arbitration – unlike a court’s decision – can be appealed only if the appellant can prove to a court that the arbitrator or panel was guilty of some form of malfeasance, or – in some jurisdictions – acted in manifest disregard of the law. As the process is intended to be faster and less costly than conventional litigation, arbitrators try to discourage extensive discovery. Also, unlike conventional litigation, private arbitration (i.e., that not under the auspices of a court system) is held in strict confidence, at least by the arbitrators. In addition, the process is more informal than a courtroom proceeding. For example, the arbitrators are not required to follow strict litigation procedures, such as the rules of evidence, which they generally apply in a relaxed form. If the arbitration is being administered by a nationally-recognized organization, such as the American Arbitration Association (the “AAA”), the rules of that organization will govern the proceedings. Arbitrators serving on the panels of such organizations are held to high standards of competence and ethics. Once the parties decide to submit their dispute to arbitration, the arbitrator or the Panel generally administer the proceedings with a firm hand.

Mediation

Unlike arbitration, a mediation generally involves a sole mediator who renders no decision but, instead, acts as a facilitator to assist the parties in reaching their own resolution of the dispute. It is essential that the parties trust in the impartiality and fairness of the mediator, and have confidence that the mediator has the skill to get the job done. The mediator will gradually lead the parties away from the firm positions with which they entered the process toward more flexible, introspective attitudes. They frequently are surprised to learn that they can then understand better their adversary’s perspective of the dispute, which is important in bringing about its resolution. The mediator will control the process, but the parties and their counsel should play an active role. While many cases are resolved in one day of intensive mediation, some cases require additional attention. In such event, the patience, yet persistence, of the mediator are required. The final result will be worth the delay.