Although both mediation and arbitration are methods used to resolve disputes, there are substantial differences in the processes.
Arbitration is similar to the court process in that the parties present evidence to the arbitrator, who makes a decision based on the facts and the law. The process is similar to a trial, involving evidence, witnesses, cross-examination and legal argument, although it is usually less formal than court procedures. The decision of the arbitrator is legally binding and may be enforced by court process.
Mediation is a process where a mediator assists the parties to reach a settlement themselves. The dispute is not resolved unless all parties agree.
Mediators do not issue orders, find fault or make findings and usually will not express a view on the merits of the matter. Instead, they help parties to reach a settlement by assisting with communications, obtaining relevant information, and developing options. Proceedings in mediation are less formal than arbitration and are usually less time-consuming.
The mediation process varies, but usually involves the parties meeting together with the mediator and explaining their views of the dispute to each other and to the mediator. The mediator then usually meets with each party separately, often going back and forth a number of times, to discuss the dispute with them and to explore ways of resolving it. These separate discussions are confidential and enable the mediator to explore with each party possible ways of resolving the dispute to their mutual satisfaction.
The emphasis in mediation is on achieving a settlement that will satisfy the parties’ mutual interests, rather than on determining their respective rights. The mediation proceedings are confidential and are held without prejudice to the parties’ rights and, should the mediation not bring about a final settlement, the parties may always resort to litigation or arbitration to have their rights determined.
Most disputes referred to mediation are successfully resolved and result in a settlement agreement that is enforceable and may be made an order of court. Many people experience higher degree of satisfaction with mediation than with arbitration or other court processes because they can control the result.