Mediation and arbitration can be a great way to solve traditional legal disputes and can be a less expensive, quicker and more pleasant process than litigation. Mediation and arbitration are considered an informal proceeding in the sense that the parties are not situated in a courtroom with evidence and testimony being presented on the record. These alternatives are not exactly the same and it is important to understand the difference. Mediation has a trained independent third party with no stake in the outcome of the litigation, who will meet with the parties and/or your attorneys to discuss the issues in dispute and to consider ways in which to resolve any disagreements the parties may have to the satisfaction of the parties. It is focused on finding the middle ground that will serve both parties and settle a dispute. Although the parties may not be in a “courtroom setting,” the results of a mediation will be just as legally binding as if the parties actually appeared before a judge. Mediation is really a procedure whose objective is to have the parties’ fashion their own solutions to their disputes, rather than relying on the decision of another person (The Judge) to tell them what they must do.
Arbitration is also neutral party chosen by both sides but has a different task – in this instance, the arbitrator reviews the case and then issue a decision as to which side is right. Arbitration can be binding or nonbinding. In the former case, a party cannot appeal the decision, unless they can prove the arbiter was biased towards the opposition. In the latter, either party can disregard the arbiter and litigate.