What is the difference between arbitration and mediation

Mediation can take place in person where parties meet face-to-face for discussions. Or, the parties may be placed at separate locations where the mediator communicates information between parties. A MOA is a cooperative agreement written between the parties to obey the agreed terms and conditions. The mediator writes the MOA which outlines details of the solutions reached by the parties. The purpose of the MOA is to have a written understanding of the agreement between the parties.

Each party should have their lawyer review the MOA. Arbitration is a process where a neutral third party makes a decision.

The decision-makers in arbitration are called arbitrators. There can be one arbitrator or multiple. The arbitrator will arrange a meeting between the parties to determine what issues need to be resolved during the arbitration.

Each arbitrator hears the parties present their case and their supporting evidence. The arbitrators may also request each party to provide their case and supporting evidence in writing called, written submissions. Arbitral decisions are sometimes called Awards. Arbitral awards are generally final and compulsory.

An award may be filed in court and enforced as if it were a court judgment. In commercial disputes, and depending on the size of the matter, mediators are often retired judges or other senior lawyers. A mediation usually occurs over the space of a single day. However the parties are able to adjourn a mediation and reconvene on another date if they agree that it may result in a resolution.

Even where mediation does not resolve the matter, the process can clarify the issues in dispute which will help keep costs down if the matter goes to arbitration or litigation. Mediation may not be suitable where the commercial relationship has broken down and there is a real sense that one of the parties is not willing to negotiate. The obvious disadvantage with mediation is that it's not guaranteed to produce an outcome. It depends on both parties being willing to negotiate, and their ability to reach an agreement that will be acceptable to both of them.

Arbitration is a process of dispute resolution where an independent adjudicator makes a binding decision on the issues in contention based on the evidence presented by the parties.

In a practical sense, arbitration is quite similar to litigation - except that arbitrations are conducted outside of court. Arbitration usually arises as a result of a dispute resolution clause in a contract.

It can also arise where the parties voluntarily decide to go to arbitration for example, to keep the matter private. The arbitrator is chosen by agreement between the parties. If the parties are unable to agree on a specific arbitrator, they will often agree on an independent person or body to appoint the arbitrator.

Unlike mediation, arbitration has a more structured and formal process. For example, in arbitration:. An arbitral decision can normally be registered in court, and then enforced like a court judgement. There are circumstances where an arbitrator's decision can be appealed, however this will sometimes depend on the nature of the error involved. Although the arbitration is very similar to litigation, arbitration offers a more flexible and efficient process.

It can often be finalised in a much shorter time frame than litigation. Press Releases. About Us. Highlights What is the difference between arbitration and mediation?

In an arbitration, the arbitrator looks into the legal rights and wrongs of a dispute and makes a decision. Once the arbitrator has arrived at a decision, it is binding on parties whether they agree with it or not.

It is very much like the way a court case is decided by a judge, except that the process does not take place in a court room, and it is not open to the public.