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Arbitration is also termed as ADR (alternative dispute resolution) where the conflicts or disputes are resolves outside the court. Whereas mediation can be termed as an assisted negotiation and communication between two parties for reaching a certain agreement. Arbitrations are considered as consensual which means that it only takes place when both parties agree over it. Moreover both arbitration and mediation are used in conjunction with litigation process where any one of the opposing parties can communicate and give it their fullest and when it fails then the next step is to go for a trial. If we look upon mediation, it is a non-binding process while arbitration is a binding process. Arbitration involves a single or multiple arbitrators/panel of arbitrators while on the other hand in mediation there is an involvement of only one mediator. So when the decision is made in the presence multiple arbitrators then it is done on the basis of the vote and in the situation where there is a mediator the resolution is made by looking up to the facts through communication and negotiation. Moreover arbitration is like a less formal court but more formal than of process mediation, as the arbitrator can be a professional engineer etc. or can be a retired judge or even a senior lawyer. And the parties present their cases outside the court and in the end the arbitrator has the power to give a legal binding decision which they have to follow and if not then it can be enforced. Whereas in mediation the process of negotiation is handled much more informally and flexibly with the help of the mediator. Here the dispute is discussed with the parties and it is discussed a million time among them until and unless a mutual decision is reached and once it had then the parties often make a written statement of it. In short the function of the mediator is to facilitate the discussion or the negotiation while the arbitrator renders a decision. Furthermore mediation is cost-effective, more efficient and reduced trials. While arbitration is an expensive, mostly inefficient, time-consuming and a less reliable process.
Definition of Arbitration
When some parties have a dispute then it is handed over to an arbitrator who can be retired judge or a senior lawyer etc. who then gives a binding decision which they have to follow. It is a less formal process but not completely informal. The arbitration in consensual and the parties has the choice of choosing their sole arbitrators i.e. there can be a total of more than one arbitrator. The whole process of arbitration is confidential and conducted neutrally.
Definition of Mediation
It is a very simple and informal process where assisted negotiation for a certain agreement is done. It is voluntary that the parties can leave anytime they want to no matter what the reason. Additionally it is a negotiation which is done collaboratively as none can impose decisions on anyone. The participants have the decision making authority but only through negotiation as nothing can be imposed but in the end the decisions made are satisfying and informed as equal participation is taken. And it is the role of the mediator to make sure that the agreements are reached in a knowledgeable manner, so none in the end is left unknown about any fact. Furthermore, the mediator here is a single mediator who is balanced, neutral, safe, and impartial.
Differences in a Nutshell
- Arbitration can be done voluntarily and by compulsion; mediation is voluntarily done.
- Formal process of reaching to a decision; mediation is not at all a formal process.
- There can be one or a panel of arbitrators; mediation includes only one mediator;
- The parties in arbitration have to agree with the decision made by the arbitrator as the matter is handed over to him; in mediation the decision is made collectively and collaboratively with the help of the mediator.
- Mediator has the role of facilitating the negotiation process while the arbitrator makes a decision regarding the matter.
- The person is the arbitrator must have expertise and legal training while it is not necessary for a mediator.
- The decision made by the arbitrator can be essential and has the chances of leading further into litigation in case of a panel; mediation is the process where the mediator chosen by the parties usually has a significant impact on the final decision.
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We all know what mediation is even if we don’t exactly know the meaning of the term, another one which quietly relates with is as known as Arbitration. Both of them have been discussed her in the article so that people have a better idea of what they mean and what are the key differences between them.