Arbitration vs Mediation
Have you heard of the acronym ADR? It stands for Alternative Dispute Resolution, and is meant to save a person from the blues he is sure to receive if he takes his case to a court of law for settlement. Disputes, when taken for settlement to a court of law, are not only time consuming and expensive, the verdict of the jury is sure to bring disappointment to one of the quarreling parties. With so many horror stories of cases taking too long to be settled in courts, it is prudent to go for arbitration or mediation that are two of the ADR’s. There are similarities in these two dispute settlement mechanisms, but there are differences that will be highlighted in this article. Knowing these differences will be helpful for common people, should they get embroiled in a dispute in future that needs settlement?
Nowadays, it is common to mention about arbitration or mediation in the contract should there be any dispute in future as a settlement mechanism. This is done to save the parties from hiring expensive attorneys and other miscellaneous fees of courts. The case also drags on unnecessarily in courts. These reasons prompt people to go for either arbitration or mediation. But it is better to know the differences between these two dispute settlement mechanisms before choosing either of the two.
What is Arbitration?
Arbitration is closer to dispute settlement in a law court as it involves appointment of a person as an arbitrator who performs a role similar to that of a judge in a court of law. Arbitrator hears and considers evidence before arriving on a decision that shall be binding upon both parties. His decision is legal, binding, and often final in the sense that it is already mentioned in the contract that his decision cannot be challenged in a court of law. Contracts, often have a provision of a fixed duration arbitration which is good for both the parties as they are spared from lengthy trials that prove a financial drain. Number of witnesses is also limited in arbitration to save time, as it is seen in court trials that a lot of time gets wasted because of the practice of summoning of witnesses that have no impact on decision making process.
What is Mediation?
Mediation is more of facilitative system where the decision does not come from the mediator but he rather plays the role of a facilitator and the parties in dispute themselves arrive at a solution that is acceptable to both. Mediator helps and assists the parties to reach a negotiated resolution. Mediator does not have the authority to pronounce a decision but he makes communication possible between quarrelling parties. With ice broken, parties, goaded and assisted by mediator, come to a resolution of a dispute on their own. Though, mediator may be a legal authority having skills to present alternatives, parties are free to accept or reject these suggestions. They can come up with their own negotiation formula which is acceptable to all.
What is the difference between Arbitration and Mediation
• Both arbitration and mediation are ADR (alternative dispute resolution mechanisms)
• Both are less formal than a court of law, also less expensive, speedier, and less tiring.
• While it is an arbitrator who performs the role of a judge in case of arbitration, mediator is more of a facilitator and does not pronounce any decision
• Arbitrator is a neutral person who is a legal authority (attorney or a judge). He listens to evidences and witnesses presented by attorneys of both the parties and gives a verdict that is legally binding on both the parties involved in a dispute
• In mediation, there is no decision making by the mediator and he merely helps and assists the parties to engage in negotiations and to come up with settlement on their own.
• While, an arbitrator is a legal authority, this is not necessarily true about a mediator, who can be a specialist in any other field also.
• There is no dress code in ADR and this saves on a lot of time and effort.