Arbitration vs. mediation: What’s the difference?

On Behalf of | Oct 9, 2019 | Business Law |

If your Georgia business becomes embroiled in a legal matter, you will generally have one of three options for resolving it: Litigation, arbitration and mediation. Litigation occurs when a lawsuit goes to civil court, where a judge presides over a matter, both parties argue their case and either a judge or jury makes a final decision. Litigation is time-consuming, emotionally draining, unpredictable and, above all, expensive. For this reason, most individuals and businesses strive to avoid litigation through arbitration or mediation. FindLaw explains the differences between the two.

Both arbitration and mediation require an impartial third party to supervise the proceedings and hand down a binding or non-binding decision. However, it is not uncommon for parties to use mediation to reach a tentative agreement, and then proceed to arbitration to finalize the outcome.

The arbitration process utilizes a panel of several arbitrators who play the collective role of “judge.” The panel reviews evidence, gives its opinions regarding the evidence and hands down a binding or non-binding decision. Though arbitration can occur with just one arbitrator, it is more common for both parties to select their own arbitrators, and for those two arbitrators to select a third. The arbitrators will then make a final decision based on the majority vote.

Mediation, however, typically only utilizes one mediator. The mediator does not make opinions or judgments but rather, helps facilitate discussions and move parties toward a peaceful resolution.

This article should not be used as legal advice. It is for educational purposes only.