The Difference Between Arbitration and Mediation

Both arbitration and mediation are faster, and typically much less expensive, ways of resolving real-estate and other disputes than going to court. But the two are very different, and there are pros and cons for each. Here is a short primer on the two approaches.

Arbitration

Here the parties submit evidence to the arbitrator, a neutral person who hears all the evidence presented by each party and then renders a binding decision. (If the amount in dispute is small, parties generally advocate for themselves without hiring an attorney.) Both parties must agree in advance to abide by the arbitrator’s finding–something that is sometimes even written into a contract before there ever was a dispute. (Only a few standard real estate contracts contain this clause, although it’s common in contracts between individuals and businesses in some industries.) Arbitration is typically conducted outside of the court system, typically in the offices of the arbitrator. The arbitrator is selected by both parties and the fee is generally shared by each. Because an arbitrator’s ruling cannot be appealed, problems are resolved much more quickly than with a lawsuit.

Mediation

Mediation is an effort to reach an agreement that satisfies both parties. It is a non-adversarial process, where each party (typically in separate rooms) speaks in confidence to the mediator, who tries to help the parties reach their own resolution to the dispute. In some fields, like divorce, the court requires that mediation be undertaken early in the process; other times mediation is done outside the court system in a mediator’s office. Unlike arbitration, mediation does not result in a binding decision unless a mutually satisfying agreement is reached by the parties; if not, they can still go to litigation. For this reason there is little downside to attempting a resolution via mediation. As with arbitration, the mediator’s fees are generally split by the parties.

The Law Office of Gary Landau offers both mediation and arbitration. Click here to learn more.  Call the office at 954-979-6566 for a FREE consultation. Certified mediator and longtime arbitrator Gary Landau personally returns all calls to him.