Simply Put: What are Mediation and Arbitration?

Mediation and arbitration are two common ways to resolve disputes without going to court, but they work quite differently. In the simplest terms, mediation emphasizes cooperation and choice, while arbitration emphasizes decision-making and finality.

Mediation is a collaborative process. A neutral mediator helps the parties communicate, understand each other’s perspectives, and explore possible solutions. The mediator does not make decisions or impose outcomes. Instead, the parties remain in control and can choose whether to settle and on what terms. Their settlement is typically set out as an agreement – a set of terms and conditions with which each party voluntarily agrees to comply. Though lawyers are often involved in helping parties, mediation is typically informal, confidential, and focuses on preserving and, if possible, improving relationships.

Arbitration is more like a private court process. A neutral arbitrator (or sometimes a panel of decision makers) listens to evidence and arguments from both sides and then makes a decision, called an “award”. This decision is intended to be binding on the parties, meaning they each must do (or not do) what the award instructs, including paying costs as decided by the Arbitrator. Arbitration is more structured than mediation but still can be quicker and more flexible than formal litigation in court.

Both arbitration awards and mediated settlement agreements could be enforced in court, if necessary.