What is the Difference Between Mediation and Arbitration?

Mediation and ArbitrationAlternative dispute resolution, or ADR, refers to several different methods for resolving disputes between parties out of court – including mediation and arbitration. These methods allow parties to reach a settlement while avoiding litigation, which is often time-consuming and costly. Alternative dispute resolution allows the disputing parties to discuss their grievances in the presence of a neutral third party and hear each other’s positions to arrive at solutions upon which they all agree. As court calendars continue to become overwhelmed, many parties are choosing ADR to mutually accommodate for financial and time restrictions.

Today, a significant number of civil cases are settled prior to proceeding to court through some alternate form of dispute resolution. Below we outline the basics of mediation and arbitration and why you might consider ADR for your workplace dispute.

Mediation

Mediation is a form of alternative dispute resolution which involves the two disputing parties and a third, neutral party known as a mediator. While courts can mandate that the parties attempt to reach a resolution through mediation, actually coming to a resolution that is mutually agreed upon is voluntary.

Mediation allows for the disputing parties to discuss their issues while in the presence of the mediator who facilitates civility in the discussions. Though the mediator is available to encourage meaningful discussion and resolution, it is the parties who are ultimately responsible for coming to that agreement that is mutually acceptable. In other words, the mediator has no authority to reach a decision on behalf of the parties.

Mediation can be held in sessions in which both parties are present or in separate sessions where the mediator speaks to both parties alone and acts as a middleman in facilitating the discussions. It is strongly recommended that both parties are represented by an attorney during mediation regarding workplace disputes. Having someone who is familiar with the mediation process, as well as state and federal law, significantly improves your ability to advocate for favorable settlement terms.

While the decision reached upon agreement between the parties is not legally binding, a mediator will often reduce the parties’ agreement to a written contract. Once reduced to writing, that contract and the decision reached within can be enforceable in court.

Steps in Mediation

Most begin with the mediator establishing some ground rules and stating the goals of the mediation and end with the parties arriving at some mutually agreeable resolution. Below are the steps that are commonly taken in mediations:

  1. The mediator will make opening statements containing pertinent information for the parties, including the rules and goals of the mediation.
  2. The parties will make their opening statements that often include their views regarding the dispute and some form of an agreement that they hope to reach.
  3. The parties will respond to each other’s opening statements while the mediator facilitates an effective and civil discussion.
  4. The mediator will speak to each party privately and discuss their positions while exchanging offers.
  5. The mediation will close. Upon the closure, the parties might reach an agreement, and the mediator may reduce that agreement to a written contract. If the parties have not reached an agreement, the mediator will suggest another session or some other route to resolving the dispute.

Benefits of Mediation

Mediation offers several benefits as opposed to litigation, including:

  • Cost: Litigation is often very costly. Attorney fees for mediation are typically lower in cost, as it does not include undergoing extensive court processes.
  • Confidentiality: Litigation provides records that are available to the public, whereas the mediation process remains confidential. Additionally, the mediator cannot be forced to testify should the dispute go to court in most cases.
  • Mutual Agreement: Mediation allows for the relationship between the disputing parties to remain civil by fostering an ability to reach an agreement where both parties “win.”
  • Influence on Outcome: During mediation, the parties have control over the resolution; in litigation, the outcome is left in the hands of the judge or jury.

Arbitration

Arbitration, like mediation, is a form of alternative dispute resolution that is less time consuming and less costly than litigation. It involves the two disputing parties and a third, neutral party. However, unlike mediation, the third party, called an arbitrator, makes the decision for the parties in a dispute.

Arbitration is a process that is less formal than court but more formal than mediation. It involves procedures that are similar to litigation where someone else decides on the issue after hearing arguments and reviewing evidence, as opposed to informal discussions between the two parties. While similar to the litigation process, it is less formal in that the parties aren’t required to abide by the rules of evidence and procedure.

Like mediation, arbitration can be voluntary or mandatory. However, unlike mediation, arbitration can result in decisions that are binding or non-binding. A binding decision is one that is final and enforceable in court. A non-binding decision is one that is advisory and only final once it is accepted by both parties. If a party is not satisfied by the decision reached by an arbitrator, it can institute a hearing to review.

Benefits of Arbitration

The benefits of arbitration include:

  • Cost and time: Arbitration is quicker and less costly than litigation and lacks the complexities involved in litigation. However, arbitrators are typically more costly than mediators.
  • Flexibility: Litigation timelines depend on court calendars. Arbitration allows for schedules to be built around the availability of the parties.
  • The rules of evidence and procedure don’t apply during arbitration, making the process simpler.
  • Confidentiality: The parties can agree to keep all proceedings and final decisions private.

Are You Involved in a Workplace Dispute? Call Us Today

If you are involved in an employment dispute and wish to avoid the costly and time-consuming processes involved in litigation, call attorneys at Noble Law. We provide consultations in our offices in New York and North Carolina, as well as remotely via videoconferencing. Call the Charlotte office at 704.626.6648, the Triangle office at 919.251.6008, or the New York office at 212.662.6500, or reach out for a consultation online for North Carolina or New York.

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