“What is the difference between Mediation and Arbitration?”
Mediation is a process where two sides (or more in complicated cases) meet together with a neutral third party, called the Mediator, to negotiate and try to resolve a case. The parties may agree on a resolution, but are not required to, and the mediator does not make any rulings.
Arbitration is similar, with both parties appearing before a neutral third party, called the Arbitrator, but the arbitrator will make a ruling and issue a decision after hearing evidence, rather than working with the parties to negotiate a settlement.
There are two types of arbitration: binding arbitration and non-binding arbitration. In binding arbitration, the ruling is final and will become a court order if needed for enforcement. In non-binding arbitration, either party can request a full trial in front of a judge or jury if they don’t like the ruling.
If non-binding arbitration isn’t a final decision, why would you go through it? Well, it can be really useful to determine how a third party will view disputed evidence. Sometimes neither party will be 100% happy with the ruling, but will understand that this may be as good as the result can be for them, and therefore agree to accept the ruling even if it is not 100% in their favor. Arbitrations typical take less time and are less expensive than full trials, and they can be useful in that manner.
What kind of cases can end up in arbitration or mediation? Well, most civil cases will have some form of mediation, including a Mandatory Settlement Conference with a judge, which is essentially a judicially-mandated and streamlined form of mediation. Family law cases require mediation of child custody and visitation issues prior to a trial. Criminal cases, however, have no form of either mediation or arbitration.
Arbitration can be the only resolution method for addressing conflicts in certain kinds of contracts—arbitration clauses are common in form contracts. Some medical insurance providers even provide that any cases for medical malpractice that come from services they provide must be arbitrated rather than sent to civil court. The civil courts in California also send many disputes that are less than $50,000.00 to non-binding arbitration, which is mandatory in those cases before you can get to a trial.
An easy way to remember the difference is that in mediation you are negotiating towards a resolution; in arbitration you are presenting essentially a trial, usually in a shortened version, to an Arbitrator who will make a decision on the case based on that presentation.
DISCLAIMER: All legal principles quoted are valid as of the date of writing in the State of California. However, you should NEVER base your actions on a legal article, blog, or internet story, as facts in real life are complicated. You should have your case evaluated by an attorney experienced in the area of law needed for your case. In addition, there are often exceptions and potential changes to results that occur due to facts that you may think are trivial or unimportant. This article should not be taken in any way as legal advice on your specific legal matter.