By: Dr. Justin Wood, Th.d, CJME
Yes, mediation and arbitration are different. While they are both forms of alternative dispute resolution and share the same goal of resolving your case outside of the litigation process, there is one very significant difference.
A mediator does not have the authority to make a decision and rarely will make any suggestion as to any outcome. There are some forms of mediation (Binding Mediation used in California) that allows both parties to defer to the mediator for a final binding decision but is NOT supported by the American Bar Association, most state bar associations, and most mediation credentialing organizations will forbid the mediator from making a decisions, even if approved by the parties.
In mediation, the process is more like a negotiation between the parties with the assistance of a professional neutral to facilitate the discussions. The parties do not reach a settlement unless all sides agree. Whereas; an arbitrator’s role, on the other hand, is more like a judge (commonly referred to as a private judge) who has the authority to render an independent decision without the parties’ consent.
Arbitration is more formal than mediation and follows a process similar to the courts with systematic rules, the calling of witnesses, presentation of evidence, motions and formal opening and closing arguments.
Mediation is a technique well-suited for civil matters like neighbor conflicts, divorce and custody cases, and small business disputes. Arbitration is more commonly used between business partners/officers, contract disputes or between large businesses and consumers. Often, as part of buying or using a product, consumers enter into agreements that they will arbitrate any future disputes rather than go to court. Most courts allow consumer arbitration as it’s under federal law, while others deem this practice fundamentally unfair because arbitration rules are often set up to favor businesses at the expense of the consumer.
Neither a mediator nor arbitrator have judicial authority to force you to start the process or impose sanctions such as to put you in jail but these processes may be compelled by a court of law to appear and participate or motion for contempt in front of a court judge which could lead you to jail, if you don’t comply.
Please contact us to discuss your ADR goals and which process would best suit your case.