A comparison between mediation and arbitration

 

Mediation and arbitration are both methods of alternative dispute resolution. Although the two methods have some common features they are very different from each other in their function, prevalence and effect.

Mediation is a non-binding meeting between two parties in a dispute. The parties meet with a mediator whose task is to find common ground between the parties. The goal of the meeting is to avoid litigation and reach an agreement. Unlike arbitration, mediation does not normally conclude with a binding agreement. In most instances the parties ‘agree to agree’ (a concept which is not legally binding).

In stark contrast to mediation, arbitration is not entered into with the hope of avoiding litigation. By the time the arbitration process begins litigation is usually no longer an option for the parties – arbitration is to prevent litigation. This is because, as opposed to mediation, arbitration clauses are legally binding through operation of the Arbitration Act 1996. In arbitration the parties sign a binding agreement before they enter into the process, and then appoint arbitrators to form the tribunal. When the tribunal reaches its decision (referred to as an ‘award’), the award is binding on both parties and litigation is no longer a possibility.

If you are in a dispute and are looking for alternative dispute resolution, both mediation and arbitration are reasonable options, but should not be thought of as serving the same purpose. Statistics show that if you enter mediation you are still more likely to resort to litigation, but when arbitration is entered into, the award that is reached is final.

If you would like to obtain legal advice on arbitration, mediation or any other type of alternative dispute resolution, Caven can put you in touch with a local specialist arbitration solicitor free of charge. So, if you have any questions or would like our help in finding local specialist arbitration solicitors please call us on 08001 221 2299 or complete the web-form above.

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