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Difference between mediation and arbitration


The difference between mediation and arbitration lies in the nature of the judgment adopted by the experts. While the decision made by the arbitrator is binding on the parties, the mediator does not make the decision, but helps the parties reach an agreement.

The occurrence of the dispute is very common in all fields, not only in business, especially when the issue is related to an opinion, the unanimous agreement of the parties is rare. There are several dispute resolution alternatives, such as conciliation, mediation, arbitration, adjudication, collective bargaining, etc. Of these, mediation and arbitration are two processes that are used instead of the litigation process, in order to resolve conflicts between the parties.

Comparative graph

Basis for comparison Mediation Arbitration
Sense Mediation refers to a dispute resolution process in which an independent third party helps the parties involved to reach a solution, according to everyone. Arbitration is a substitute for public trial, without resorting to the courts, in which an independent third party analyzes the entire situation and makes a binding decision for the parties.
Nature Collaborative Adversarial
Process Informal Formal
Role of the expert Facilitator Judge
Expert number One One or more
Private communication The meeting between the interested parties and the lawyer is carried out jointly and separately. Only probation hearings, not private meetings with the arbitrator.
Control over the result Parties referee
Basis of the result Needs, rights and interests of the parties. Facts and evidence.
Go out It may or may not be achieved. Definitely reached.
Decision The mediator does not issue any judgment, but makes an agreement only with the approval of the parties. The decision of the arbitrator is final and binding on the parties.
Conclusion When the agreement is reached or the parties are stagnant. When the decision is made.

Mediation Definition

Mediation is described as a method of dispute resolution, in which the parties do not have to go to court to find a solution, but an informal meeting is held in which a neutral third party, that is, a mediator, It helps them reach a decision, accepted by both. parties.

It is said that each and every participant takes an active part in the audience. In addition, the process is confidential, in which the details of the discussion are not disclosed to any other person, outside the hearing.

The mediator, who is independent, does not issue any judgment or guide, but creates a consensus between the parties involved, through communication and negotiation techniques. l / She plays the role of facilitator, by encouraging interaction between the parties.

The process aims to reach a decision that is acceptable to both parties. In the case, mediation does not give rise to any agreement; then the parties can resort to arbitration or litigation.

Arbitration Definition

Arbitration involves a procedure in which an independent third party studies the dispute in detail, listens to the parties involved, obtains relevant information and then makes a decision that is considered final and binding on the parties. It is a formal meeting, which begins as a claim and, ultimately, the dispute is sent to one or the panel of arbitrators, who issue the sentence after taking into account all the facts and evidence related to the dispute.

The process is very similar to a judicial procedure; It is a private trial in which the dispute is resolved out of court. The parties provide testimony, the third party deals with the evidence and imposes a decision that binds both parties and is legally enforceable.

Key differences between mediation and arbitration

The difference between mediation and arbitration can be clearly established on the following grounds:

  1. A conflict resolution process in which an independent third party helps the parties involved to reach a decision, according to everyone, is known as mediation. Arbitration is a private trial, in which a rational third party analyzes the dispute, listens to the parties involved, collects facts and passes a decision.
  2. Mediation is collaborative, that is, where two parties work together to reach a decision. The arbitration is contradictory.
  3. The mediation process is a bit informal, while arbitration is a formal process, which is much like a judicial proceeding.
  4. In mediation, the third party plays the role of facilitator, in order to facilitate negotiation. On the contrary, the arbitrator plays the role of judge to issue a decision.
  5. There can only be one mediator, in the mediation. Against this, several arbitrators or panel of arbitrators may be there in the arbitration.
  6. In mediation, along with joint meetings, mediators listen to both parties in the private meeting. On the other hand, in arbitration, the arbitrator remains neutral, and such private communication is not carried out. Thus, the trial is based on probation hearings.
  7. Stakeholders have full control over the mediation process and the outcome. Unlike arbitration, where the arbitrators have full control over the process and the result.
  8. The outcome of the mediation is based on the needs, rights and interests of the parties, while the arbitration decision depends on the facts and evidence presented to the arbitrator.
  9. Mediation may or may not result in a solution, but arbitration definitely finds a solution to the matter.
  10. The mediator does not issue any kind of judgment but makes an agreement only with the approval of the parties. Unlike arbitration, the decision made by the arbitrator is final and binding on the parties.
  11. The mediation process ends when the agreement is reached, or the parties are in a stalemate. The arbitration concludes when the decision is rendered.

Conclusion

Both processes can be voluntary or mandatory; where the third party does not need to be trained. Choosing between the two alternatives is a very confusing and tedious task because both have their pros and cons.

Mediation guarantees confidentiality, but does not guarantee the achievement of the result. In contrast, arbitration gives a guaranteed result, but the confidentiality of the matter is at stake and, at the same time, the cost of arbitration is greater than mediation. Then, before opting for either of the two processes, first identify your requirements, the suitability and the value of the decision. Only then will you make a correct choice of the dispute process.