Mediation vs Arbitration
A detailed comparison to help you choose the right option.
Mediation
A voluntary process where a neutral mediator helps parties reach a mutually acceptable resolution through guided negotiation.
Advantages
- Parties control the outcome
- Preserves relationships
- Lower cost than arbitration or litigation
- Confidential and flexible
Disadvantages
- Non-binding unless agreed
- No guaranteed resolution
- Depends on parties' willingness
- May delay resolution
Arbitration
A binding process where a neutral arbitrator hears both sides and makes a final, enforceable decision.
Advantages
- Binding and enforceable decision
- Faster than litigation
- More private than court
- Arbitrator expertise in subject matter
Disadvantages
- Limited appeal rights
- Can be expensive
- Less formal discovery
- Parties give up control of outcome
Key Differences
- 1Control: Mediation lets parties decide; arbitration imposes a decision
- 2Binding: Mediation is typically non-binding; arbitration is binding
- 3Cost: Mediation is usually cheaper
- 4Process: Mediation is collaborative; arbitration is adversarial
- 5Many contracts require mediation first, then arbitration if mediation fails
Which Should You Choose?
Include both in your contracts — require mediation first (to preserve relationships and save costs), then arbitration if mediation fails (to ensure final resolution). This 'med-arb' approach is considered best practice.
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