Mediation VS Arbitration: Which one is better?

Mediation VS Arbitration: Which one is better?

December 15, 2017

Many think that mediation and arbitration go hand-in-hand, as they are often mentioned together and are both an alternative to litigation. However, they are in fact two very different things. When considering the choice between these two in order to decide which one is better for your situation, you should first consider these questions.

How quickly do you require a resolution?

Inarguably, arbitration is considerably less time-consuming than going to court. However, by far the fastest resolution can be achieved through mediation.

In essence, arbitration is like a mini-trial, so even though you don’t have to fit in a trial date and work around a courts calendar there are still many legal delays that you will encounter. Your lawyers will need time to compile evidence, perform research, engage in pre-hearing discovery, draft briefs and prepare your case. All of which is even before the actual proceedings, in which both sides will go through the long, drawn out process of trying to convince the arbitrator to rule in your favour. Plus, let’s not forget the waiting game post hearing.

Mediation, however, can schedule the meeting at a time convenient for both parties, there are no protocols and presentations of evidence that need to be done by your lawyers, everyone is focused on settling as quickly as possible, and resolutions are solved quickly. All-in-all it is quite common for mediation to have conflicts solved within less than a day. Of the two, when a short, fast settlement is favourable, mediation is absolutely the better choice.

How much money are you willing to spend?

As you can probably guess, the larger timeframe and protocols required for arbitration make it a much more costly process than mediation. If the parties involved are happy to quickly resolve their disputes and settle in mediation, it is almost always a money saver. Legal bills are significantly smaller in mediation and you won’t have to pay any ongoing costs if settlement is achieved swiftly.

Are you OK with handing over control?

In arbitration, the final decision is left in the hands of a third-party arbitrator. Once his ruling is made, that decision is final no matter if even both parties are unhappy with the results. An arbitrators ruling cannot be appealed (though there are rare exceptions), and so you are ultimately giving up full control of the outcome and settlement decision to another.

In mediation, the parties themselves determine the outcome. A facilitator (lawyer) is present to assist in the negotiations and offer advice in order to achieve a mutually acceptable and beneficial resolution, but ultimately the final decision remains in the hands of both parties. If there is no agreement on terms made, there is no imposed settlement. Mediation is non-binding and no third-party is present to issue a ruling. Until such a time as when both parties agree to each other’s terms, the decisions and outcomes remain in their control.

Are you willing to break ties with the other party involved?

Through it is still a much less formal process than litigation, arbitration is still quite an adversarial process. In effect, most often it will cause confrontation conflict between the parties. The goal of arbitration is to discredit the other party, and so, the results are almost always stressful and tend to leave both parties feeling bitter and resentful.

Comparatively, mediation is relatively amicable. Both parties sit down to discuss with each other their teams and needs, with a lawyer overseeing and work with each other to reach a decision that both are happy with. If you are wanting to still have any sort of relationship with the opposing party after settlement, mediation is always the better decision.

As a professional Lawyer, Nicholas Radich of Radich Lawyer, is qualified to act on behalf of clients in a court dispute, however the goal is always to first explore alternative solutions for my client’s conflicts, and only use a court room as a last resort. My experience and expertise can make a difference, as there is an art to successful mediation. My role as a mediator is to go back and forth between both parties involved in a dispute and find an outcome that both parties are willing to agree to. Taking a proactive approach, such as mediation, can save you not only money and time, but stress. Give my Gold Coast office a call to discuss your situation.