Question 1

What is the difference between mediation and arbitration?

Accepted Answer

Mediation is a facilitated negotiation process where a neutral mediator assists the parties to reach a mutually acceptable resolution. The mediator does not impose a decision and the process is non-binding unless the parties reach agreement. Arbitration, by contrast, is a determinative process where an arbitrator hears evidence and arguments from both parties and makes a binding decision (an award). Arbitration is essentially a private form of adjudication and the award is generally enforceable in the same way as a court judgment.

Question 2

When is arbitration preferable to litigation?

Accepted Answer

Arbitration may be preferable to litigation where the parties want confidentiality, where specialist expertise is required (the parties can choose an arbitrator with relevant industry or legal experience), where the dispute involves international parties and enforcement of a judgment in foreign jurisdictions may be required, or where the parties want greater control over the procedure and timetable. Arbitration can also offer cost and time savings for straightforward disputes, although complex arbitrations can be as expensive and time-consuming as litigation.

Question 3

Are mediation outcomes legally binding?

Accepted Answer

Mediation outcomes are not legally binding unless the parties enter into a written settlement agreement recording the terms of their resolution. Once signed, a settlement agreement is a binding contract and is enforceable in the same way as any other contract. In court-ordered mediations, the settlement may be recorded as consent orders, which have the force of a court judgment. We always recommend that settlement agreements be drafted or reviewed by a lawyer before execution.

Dispute Resolution

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Gilbert Flynn

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