Mediation V. Arbitration- What’s the Difference?

In the realm of “working things out” as an alternative to fighting in court, it seems that many terms get randomly thrown around, leading to a lot of confusion.  You may have heard the terms “collaborative law”, “mediation”, “arbitration”, “alternative dispute resolution” or “conciliation”.  The difference between arbitration and mediation is one of the most often misunderstood.  While each may take on a slightly different meaning depending on the geographical area & local court rules, this article is meant to address the most widely used usage of both terms to give you a clear understanding of the difference between the two.

Both mediation and arbitration are forms of what is generally known as alternative dispute resolution, or “ADR” which is an attempt to avoid litigation.

Mediation is a process whereby two (or more) sides to a dispute agree to meet with a trained mediator whose job it is to help the parties reach an agreement. The mediator is not making decisions for the parties.  A mediator does not have that authority. A mediator is more like a powerful tool in helping craft an agreement, one that each side can live with.  During mediation, the parties will be making a good faith attempt at negotiating their differences without having to take into account the legal factors that a judge might otherwise have to consider. In other words, if the negotiated result works for both parties and makes everybody relatively happy, that will usually work (unless there is a very good reason for a court to dis-approve any provision of what will later be incorporated into a legal settlement.  For instance, a court may not allow a negotiated child support amount that is not based on the payor’s income, because child support is not for the benefit of the party accepting payment but rather for the benefit of the children).  The mediation process is relatively informal and mediators may draw upon any number of methods which may be helpful. In mediation, the pressure is off because mediation is non-binding. So, at the end of the day (or several), no one has to sign any agreement that they do not want to be held to. That being said, if mediation is not successful there will be no agreement at the end of the process and may need to go back to the judge. Not all attorneys support mediation but as mediation is becoming more widely used, especially in the area of divorce, more lawyers are becoming “mediation friendly”. If you believe that your case might benefit from mediation, don’t be shy about asking any attorney that you are considering hiring what his or her views are on mediation.

Like mediation, arbitration is also used as a way to try to avoid litigation, or a judge deciding the outcome of their dispute. Arbitration is much more formal than mediation and often times, arbitration will be binding; or at least binding unless one party takes an affirmative step to reject an arbitration award, usually with a hefty fee attached.  Rejection (essentially “erasing”) an arbitration award is not always available to parties, depending on how they got to arbitration and the system which served as the framework for the dispute.  A neutral third party serves as an arbitrator who will hear everyone’s position and make a final decision in favor of one party or the other. Sometimes there will be more than one arbitrator (a “panel”) making the decision. The parties are not trying to reach an agreement themselves, but rather have brought the dispute before another who will decide in their place. It is almost like a min-trial but is less expensive and faster.  Arbitration is seldom used for issues in family law such as divorce or child support, as Illinois has not yet adopted the Model Family Law Arbitration Act, whereas mediation is much more common this state.

Carol O’Connor Cadiz is trained in Family Law & Divorce Mediation, and is also available to assist in certain other types of disputes.  To learn more about how mediation might be beneficial to your situation, please call our toll free number at 888 878-5442. 

Carol O'Connor Cadiz
Connect with me
Attorney & Owner at O'Connor Cadiz Law: Bankruptcy, Injury, Real Estate & Mediation