Differences Between Arbitration And Mediation

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Arbitration is an alternative that should be considered to resolve disputes between two parties. The arbitrator will weigh the facts and arguments presented from both sides and decide or settle the dispute. What if one side would rather go to court? One may wonder why it matters where claims are heard as long as they are heard somewhere. Why would an employee prefer a court of law to an arbitration proceeding?

Perhaps the most important reason one would seek court is that in arbitration your argument is heard by an arbitrator. You will not have access to a jury of your peers who would possibly be sympathetic to your claim (Nolo, n.d.). Some may feel safer with a group of jurors than with a singular person.

Arbitration can be voluntary
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Fleming, & McConnell, C. R, (n.d.). Human Resource Management in Health Care, Principles and Practice

There are many differences between arbitration and mediation. The goal of mediation is dispute resolution without court involvement. It seeks compromise from each side of the dispute and each side feels as if they can claim at least a partial win. Mediation is a voluntary process whereas arbitration can be mandated if arbitration agreements were signed when an employee was hired. Mediation is facilitated by a mediator rather than a judge or arbitrator and may be appointed by a court or privately selected. Settlements reached during mediation are not legally binding without a court order (Leiberman.n.d.).

Arbitration can be binding, meaning that the decision of the arbitrator can’t be challenged and is final. This makes arbitration more like a court proceeding than mediation, although still less formal than a court proceeding. Arbitration usually involves legal counsel and rather than seeking compromise as with mediation, arbitration ends with a prevailing side. Each side presents an argument, may call witnesses, and will present evidence. This does not occur with mediation (Lieberman,
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A decision will be made. Mediation provides no such guarantee and settlement may not be reached.

The presentation of reasonable offers is encouraged by parties who do not wish to see the other side's offer chosen. Selecting a more middle ground offer from two reasonable offers is desired.

It is possible and somewhat likely that a pre-arbitration settlement will be reached by the parties once they see the bottom line offer the other side is presenting.

If the arbitrator must make a decision, at least both of the settlement choices were chosen by the parties themselves.

Final-offer arbitration can minimize or eliminate the "chilling effect" which is the practice of disputing parties putting forth less than best offers during negotiations in hopes that the arbitrator will make a decision that will split the differences between the offers.

The beauty of final-offer arbitration is the motivation provided to parties to determine for themselves their last and best offers carefully. The truly last, best offer of the other side can be considered during the grace period to negotiate a settlement between the final two
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